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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Wednesday, May 30, 2018, Vol. 19, No. 106


                            Headlines


F R A N C E

BANIJAY GROUP: Fitch Affirms LT IDR at B+, Outlook Stable


I R E L A N D

BAIN CAPITAL 2018-1: Moody's Assigns B2 Rating to Class F Notes
BAIN CAPITAL 2018-1: Fitch Assigns B-sf Rating to Class F Notes
CONTEGO CLO V: Moody's Assigns (P)B2 Rating to Class F Notes


K A Z A K H S T A N

AGRARIAN CREDIT: Fitch Assigns BB+ IDR, Outlook Stable


N E T H E R L A N D S

CADOGAN SQUARE VII: Moody's Rates EUR13.5MM Class F Notes 'B2'
CADOGAN SQUARE VII: Fitch Assigns B-sf Rating to Class F Notes
CEVA GROUP: S&P Raises Issuer Credit Rating to 'BB-'
SCHOELLER ALLIBERT: S&P Affirms 'B' ICR, Outlook Stable


R O M A N I A

BANCA TRANSILVANIA: Fitch Hikes Long-Term IDR to BB+


R U S S I A

KOKS PJSC: S&P Alters Outlook to Stable & Affirms 'B' ICR
VENTRELT HOLDINGS: Fitch Affirms 'BB-' LT IDRs, Outlook Stable


S P A I N

ABANCA CORPORACION: Moody's Hikes LT Deposit Ratings to Ba2
CAIXABANK CONSUMO 4: Moody's Rates EUR136MM Series B Notes (P)B1
CATALONIA: S&P Affirms 'B+/B' ICRs, Outlook Negative
FT HIPOTECARIA UCI 12: S&P Raises Rating on Class B Notes to 'BB'
JOYE MEDIA: Moody's Assigns B1 CFR on Revised Capital Structure

OBRASCON HUARTE: Moody's Confirms B3 CFR, Outlook Stable
VALENCIA: S&P Alters Outlook to Positive & Affirms 'BB/B' ICRs



S W I T Z E R L A N D

VAT GROUP: S&P Raises Issuer Credit Rating to 'BB', Outlook Pos.


U N I T E D   K I N G D O M

AIR NEWCO: Moody's Rates New Sr. Sec. First Lien Facilities 'B3'
GAUCHO: Owner Mulls Sale as Part of Restructuring Plan
HOUSE OF FRASER: Half of UK Stores Expected to Close Under CVA
MARSTON'S ISSUER: Fitch Affirms Rating on Class B Notes at 'BB+'
MOTHERCARE: Rules Out Management Buyout Following CVA

POUNDWORLD: To Close 117 Stores Amid CVA Proposals
THPA FINANCE: Fitch Affirms Rating on Class C Notes at 'B'


X X X X X X X X

* EUROPE: Finance Ministers Agree on Reforming Bank Capital Rules


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F R A N C E
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BANIJAY GROUP: Fitch Affirms LT IDR at B+, Outlook Stable
---------------------------------------------------------
Fitch Ratings has affirmed Banijay Group SAS's Long-Term Issuer
Default Rating (IDR) at 'B+' with a Stable Outlook. Fitch has
also affirmed the media group's senior secured debt rating,
including for bonds and term loans, at 'BB' with a Recovery
Rating 'RR2' (83%)'.

Banijay has an experienced management team that has maintained
cost discipline during the expansion of its non-scripted content.
Non-scripted content is exposed to shifts in consumer sentiment,
but Banijay has demonstrated an ability to adapt to these trends,
including through customer diversification, with success in
renewing shows for multiple seasons and in syndicating them to
multiple countries.

The ratings are constrained by the company's high leverage,
limited size relative to peers, and the low monetisation of the
company's back catalogue through Banijay Rights. Banijay
continues to attract talented producers that understand the local
market and to expand its geographic reach, which should benefit
its operating profile.

KEY RATING DRIVERS

Leading Independent TV Producer: Banijay is the fourth-largest
producer of TV content and the largest independent producer
globally. The continued success of some of its top formats such
as "Versailles", "Kardashians" or "Survivor" is expected to
support growth and profitability in the coming years as it did in
2017. The rapid growth of over-the-top (OTT) platforms such as
Netflix is leading to additional content demand across the
industry. However, the cost of production and the length of
development mean there is limited ability to produce new scripted
content, whereas Banijay's focus on non-scripted content means it
can be produced and delivered swiftly.

Online Platforms Support Increased Demand: In both Europe and the
US, there is a continuing trend for customers to consume content
through online platforms such as streaming services and social
media platforms. The proliferation of such platforms, with many
national and regional firms, and competition from traditional
media companies has seen a continued strong demand for both
scripted and non-scripted content. This is supportive of
Banijay's business and can be seen in continued revenue growth.
The risk, however, is that it reaches "peak TV" and demand
declines in the medium term. This risk is partially mitigated by
Banijay's more flexible cost structure.

Consistent FCF Finance Earn-Outs: Although yearly interest
expense increased following the company's 2017 refinancing, funds
from operations (FFO) margins are expected to stabilise at around
8%, due to stronger EBITDA margins. Significantly higher working
capital outflow in 2017 led Fitch to forecast higher working
capital requirements, which results in sustainably lower cash
conversion ratios around 50%. Due to an asset-light business
model and low capex at 2%-4% of sales, Fitch expects Banijay to
remain free cash flow (FCF)-positive. This will help finance an
estimated net EUR40 million cash outflow from earn-outs in 2018
and further commitments from 2019 onwards.

Working Capital Requirements Increase: 2017 saw a working capital
outflow of EUR55 million due to the longer development timelines
of scripted shows and timing mismatches between incurring
expenses and receiving offsets such as tax rebates. While this
working capital movement is expected to be partially offset in
2018, the evolving business model of Banijay will involve larger
working capital movements. Fitch believes that management has the
discipline to manage these movements but any contrary evidence
could have a negative impact on the ratings.

Renewals Balanced by Cancellation Risk: Banijay has had success
with its top show formats being renewed, in particular with Fort
Boyar and 71 Degrees North and Fitch expects this trend to
continue. However, the recent cancellation of a season of Koh
Lanta in France, due to accusations between two contestants,
highlights the potential impact of cancellation risk. The show is
expected to resume next year, and the impact on 2018 sales is
expected to be less than 2%. Fitch does not expect an impact on
other Survivor shows outside France. Other reasons for
cancelation may include increased popularity of competing shows
or loss of a production contract with a broadcaster. Overall,
renewals and success from Banijay Rights content deals support
high revenue visibility.

M&A Continues Geographical, Format Diversification: Banijay has
successfully integrated the Castaway acquisition and, over the
last year, Banijay has acquired a 25% stake in Shauna Events and
acquired 7Wonder, bolstering the production of non-scripted and
digital content. On scripted content, Banijay launched Yellow
Bird Productions and Neon Ink in the UK. Fitch expects that
Banijay's independence will continue to allow it to source
transactions in both scripted and non-scripted content. However,
rising valuations and increased competition could limit these
opportunities.

Shareholder Distributions Expected: While Banijay has not
historically paid dividends or made significant shareholder
distributions, Fitch expects that these distributions will occur
going forward. Banijay has requested consent to repay EUR25
million of its subordinated shareholder loan and may make
additional shareholder distributions in the future. Fitch views
distributions of this magnitude as rating-neutral and supported
by the company's overall profitability.

DERIVATION SUMMARY

Banijay is the leading independent TV production studio and the
fourth-largest globally. Its primary competitors are EndemolShine
Group, ITV Studios, FremantleMedia and All3Media. It has a
greater proportion of unscripted content than its peers, although
the acquisition of Zodiak increases its exposure to scripted
content.

Fitch covers several US peers such as Time Warner, Sky Plc,
Twenty-first Century Fox and NBC Universal Media. They are, much
larger, more diversified and less leveraged than Banijay.
Compared with these investment grade names, Banijay's profile is
more consistent with a high 'B' category rating.

KEY ASSUMPTIONS

Fitch's Key Assumptions within its Rating Case for the Issuer

  -Revenue growth trending towards 4% in 2020

  -EBITDA margin stable around 12.5% of sales

  -Increased demand for working capital due to the shift towards
producing scripted content

  -EUR145 million in payments for earn-outs and long term
compensation from 2018-2021

RATING SENSITIVITIES

Future developments that may, individually or collectively, lead
to positive rating action

  -FFO adjusted net leverage trending below 4x

  -Increased scale with sales above EUR1 billion, improved mix
between non-scripted and scripted content and further development
of the digital strategy

  -Evidence Banijay can manage working capital movements from an
increase in scripted content

  -Successfully development of the Banijay Rights business

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action

  -FFO adjusted net leverage trending above 5.5x

  -FFO fixed charge coverage below 3x

  -EBITDA margins below 10%.

  -Failure to renew leading shows and delays in the development
of the digital strategy

LIQUIDITY

Satisfactory Liquidity: Banijay's comfortable liquidity is driven
by EUR68 million cash left on balance sheet at end- 2017,
consistently positive FCF, moderate earn-outs cash outflow in
2019 and a EUR35 million revolving credit facility. Fitch
believes that the transition to a greater proportion of scripted
content will increase working capital requirements, but Banijay's
liquidity is sufficient to meet those needs.


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I R E L A N D
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BAIN CAPITAL 2018-1: Moody's Assigns B2 Rating to Class F Notes
---------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by Bain Capital Euro
CLO 2018-1 Designated Activity Company:

EUR 207,600,000 Class A Senior Secured Floating Rate Notes due
2032, Definitive Rating Assigned Aaa (sf)

EUR 22,800,000 Class B-1 Senior Secured Floating Rate Notes due
2032, Definitive Rating Assigned Aa2 (sf)

EUR 15,000,000 Class B-2 Senior Secured Fixed Rate Notes due
2032, Definitive Rating Assigned Aa2 (sf)

EUR 25,100,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2032, Definitive Rating Assigned A2 (sf)

EUR 20,300,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2032, Definitive Rating Assigned Baa2 (sf)

EUR 23,800,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2032, Definitive Rating Assigned Ba2 (sf)

EUR 11,200,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2032, Definitive Rating Assigned B2 (sf)

RATINGS RATIONALE

Moody's definitive rating of the rated notes addresses the
expected loss posed to noteholders by the legal final maturity of
the notes in 2032. The definitive ratings reflect the risks due
to defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, Bain Capital
Credit, Ltd. ("Bain Capital"), has sufficient experience and
operational capacity and is capable of managing this CLO.

Bain Capital Euro CLO 2018-1 Designated Activity Company is a
managed cash flow CLO. At least 90% of the portfolio must consist
of senior secured loans and senior secured bonds and up to 10% of
the portfolio may consist of unsecured obligations, second-lien
loans, mezzanine loans and high yield bonds. The portfolio is
expected to be approximately 93% ramped up as of the closing date
and to be comprised predominantly of corporate loans to obligors
domiciled in Western Europe.

Bain Capital will manage the CLO. It will direct the selection,
acquisition and disposition of collateral on behalf of the Issuer
and may engage in trading activity, including discretionary
trading, during the transaction's four-year reinvestment period.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk obligations, and are subject to certain restrictions.

In addition to the seven classes of notes rated by Moody's, the
Issuer will issue EUR 35 million of subordinated notes, which
will not be rated.

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to
pay down the notes in order of seniority.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in August 2017.

Factors that would lead to an upgrade or downgrade of the
ratings:

The rated notes' performance is subject to uncertainty. The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. Bain Capital's investment
decisions and management of the transaction will also affect the
notes' performance.

Loss and Cash Flow Analysis:

Moody's modeled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 of the "Moody's Global Approach to Rating
Collateralized Loan Obligations" rating methodology published in
August 2017. The cash flow model evaluates all default scenarios
that are then weighted considering the probabilities of the
binomial distribution assumed for the portfolio default rate. In
each default scenario, the corresponding loss for each class of
notes is calculated given the incoming cash flows from the assets
and the outgoing payments to third parties and noteholders.
Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios.

Moody's used the following base-case modeling assumptions:

Par amount: EUR 350,000,000

Diversity Score: 36

Weighted Average Rating Factor (WARF): 2790

Weighted Average Spread (WAS): 3.30%

Weighted Average Recovery Rate (WARR): 43.5%

Weighted Average Life (WAL): 8.5 years

Moody's has analysed the potential impact associated with
sovereign related risk of peripheral European countries. As part
of the base case, Moody's has addressed the potential exposure to
obligors domiciled in countries with local currency country risk
ceiling of A1 or below. Following the effective date, and given
the portfolio constraints and the current sovereign ratings in
Europe, such exposure may not exceed 10% of the total portfolio.
As a result and in conjunction with the current foreign
government bond ratings of the eligible countries, as a worst
case scenario, a maximum 10% of the pool would be domiciled in
countries with A3. The remainder of the pool will be domiciled in
countries which currently have a local or foreign currency
country ceiling of Aaa or Aa1 to Aa3.

Stress Scenarios:

Together with the set of modeling assumptions above, Moody's
conducted additional sensitivity analysis, which was an important
component in determining the definitive ratings assigned to the
rated notes. This sensitivity analysis includes increased default
probability relative to the base case. Here is a summary of the
impact of an increase in default probability (expressed in terms
of WARF level) on each of the rated notes (shown in terms of the
number of notch difference versus the current model output,
whereby a negative difference corresponds to higher expected
losses), holding all other factors equal:

Percentage Change in WARF: WARF + 15% (to 3209 from 2790)

Ratings Impact in Rating Notches:

Class A Secured Floating Rate Notes: 0

Class B-1 Secured Floating Rate Notes: -1

Class B-2 Secured Fixed Rate Notes: -1

Class C Secured Deferrable Floating Rate Notes: -2

Class D Secured Deferrable Floating Rate Notes: -2

Class E Secured Deferrable Floating Rate Notes: -1

Class F Secured Deferrable Floating Rate Notes: -1

Percentage Change in WARF: WARF +30% (to 3627 from 2790)

Ratings Impact in Rating Notches:

Class A Secured Floating Rate Notes: -1

Class B-1 Secured Floating Rate Notes: -3

Class B-2 Secured Fixed Rate Notes: -3

Class C Secured Deferrable Floating Rate Notes: -3

Class D Secured Deferrable Floating Rate Notes: -2

Class E Secured Deferrable Floating Rate Notes: -2

Class F Secured Deferrable Floating Rate Notes: -3


BAIN CAPITAL 2018-1: Fitch Assigns B-sf Rating to Class F Notes
---------------------------------------------------------------
Fitch Ratings has assigned Bain Capital Euro CLO 2018-1
Designated Activity Company notes final ratings, as follows:

EUR207.6 million Class A notes: 'AAAsf'; Outlook Stable

EUR22.8 million Class B-1 notes: 'AAsf'; Outlook Stable

EUR15 million Class B-2 notes: 'AAsf'; Outlook Stable

EUR25.1 million Class C notes: 'Asf'; Outlook Stable

EUR20.3 million Class D notes: 'BBBsf'; Outlook Stable

EUR23.8 million Class E notes: 'BBsf'; Outlook Stable

EUR11.2 million Class F notes: 'B-sf'; Outlook Stable

EUR35 million subordinated notes: not rated

Bain Capital Euro CLO 2018-1 DAC is a cash flow collateralised
loan obligation (CLO). Net proceeds from the notes are being used
to purchase a EUR350 million portfolio of mostly European
leveraged loans and bonds. The portfolio will be actively managed
by Bain Capital Credit, Ltd. The CLO envisages a four-year
reinvestment period and an 8.5-year weighted average life (WAL).

KEY RATING DRIVERS

'B' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the 'B'
category. The Fitch-weighted average rating factor (WARF) of the
indicative portfolio is 32.33.

High Recovery Expectations

At least 90% of the portfolio will comprise senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch-weighted average recovery rate (WARR) of the
indicative portfolio is 67.81%.

Limited Interest Rate Exposure

There are 4.3% fixed-rate liabilities in the deal, while unhedged
fixed-rate assets cannot exceed 10% of the portfolio. Fitch
modelled both 0% and 10% fixed-rate buckets and found that the
rated notes can withstand the interest rate mismatch associated
with each scenario.

Diversified Asset Portfolio

The transaction features two different Fitch test matrices with
different allowances for exposure to the largest 10 obligors
(maximum 18% and 26.5%). The manager can then interpolate between
these two matrices. This covenant ensures that the asset
portfolio will not be exposed to excessive obligor concentration.

Unhedged Non-euro Assets

Non-euro-denominated assets that are unhedged are limited to an
exposure of 2.5% and, combined with principal hedged obligations
(hedged with FX forward agreements) are limited to a 5% exposure.
These assets are subject to principal haircuts, and the manager
can only invest in them if, after the applicable haircuts, the
aggregate balance of the assets is above the reinvestment target
par balance.

RATING SENSITIVITIES

Adding to all rating levels the increase generated by applying a
125% default multiplier to the portfolio's mean default rate
would lead to a downgrade of up to two notches for the rated
notes. A 25% reduction in recovery rates would lead to a
downgrade of up to four notches for the rated notes.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10

Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

DATA ADEQUACY

The majority of the underlying assets or risk-presenting entities
have ratings or credit opinions from Fitch and/or other
Nationally Recognised Statistical Rating Organisations and/or
European Securities and Markets Authority-registered rating
agencies. Fitch has relied on the practices of the relevant
groups within Fitch and/or other rating agencies to assess the
asset portfolio information.

Overall, Fitch's assessment of the asset pool information relied
upon for the agency's rating analysis according to its applicable
rating methodologies indicates that it is adequately reliable.


CONTEGO CLO V: Moody's Assigns (P)B2 Rating to Class F Notes
------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Contego
CLO V Designated Activitiy Company:

EUR 248,000,000 Class A Senior Secured Floating Rate Notes due
2031, Assigned (P)Aaa (sf)

EUR 10,000,000 Class B-1 Senior Secured Fixed Rate Notes due
2031, Assigned (P)Aa2 (sf)

EUR 30,000,000 Class B-2 Senior Secured Floating Rate Notes due
2031, Assigned (P)Aa2 (sf)

EUR 28,000,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2031, Assigned (P)A2 (sf)

EUR 20,000,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2031, Assigned (P)Baa2 (sf)

EUR 24,000,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2031, Assigned (P)Ba2 (sf)

EUR 12,000,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2031, Assigned (P)B2 (sf)

Moody's issues provisional ratings in advance of the final sale
of financial instruments, but these ratings only represent
Moody's preliminary credit opinions. Upon a conclusive review of
a transaction and associated documentation, Moody's will
endeavour to assign definitive ratings. A definitive rating (if
any) may differ from a provisional rating.

RATINGS RATIONALE

Moody's provisional rating of the rated notes addresses the
expected loss posed to noteholders by the legal final maturity of
the notes in 2031. The provisional ratings reflect the risks due
to defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, Five Arrows
Managers LLP ("Five Arrows") has sufficient experience and
operational capacity and is capable of managing this CLO.

Contego CLO V is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured loans and senior secured
bonds and up to 10% of the portfolio may consist of unsecured
senior loans, second-lien loans, mezzanine obligations and high
yield bonds. The initial portfolio will be mainly acquired by way
of participations. Until the assets are sold (the participations
are required to be elevated as soon as reasonably practicable),
the issuer is exposed to the risk of the unrated originator
default. The portfolio is expected to be at least 65% ramped up
as of the closing date and to be comprised predominantly of
corporate loans to obligors domiciled in Western Europe.

Five Arrows will manage the CLO. It will direct the selection,
acquisition and disposition of collateral on behalf of the Issuer
and may engage in trading activity, including discretionary
trading, during the transaction's four-year reinvestment period.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk and credit improved obligations, and are subject to certain
restrictions.

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to
pay down the notes in order of seniority.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in August 2017.

Factors that would lead to an upgrade or downgrade of the
ratings:

The rated notes' performance is subject to uncertainty. The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. Five Arrows' investment
decisions and management of the transaction will also affect the
notes' performance.

Loss and Cash Flow Analysis:

Moody's modelled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 of the "Moody's Global Approach to Rating
Collateralized Loan Obligations" rating methodology published in
August 2017. The cash flow model evaluates all default scenarios
that are then weighted considering the probabilities of the
binomial distribution assumed for the portfolio default rate. In
each default scenario, the corresponding loss for each class of
notes is calculated given the incoming cash flows from the assets
and the outgoing payments to third parties and noteholders.

Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios.

Par amount: EUR400,000,000

Diversity Score: 38

Weighted Average Rating Factor (WARF): 2700

Weighted Average Spread (WAS): 3.4%

Weighted Average Coupon (WAC): 4.0%

Weighted Average Recovery Rate (WARR): 43.5%

Weighted Average Life (WAL): 8.5 years

As part of the base case, Moody's has addressed the potential
exposure to obligors domiciled in countries with local currency
country risk ceiling (LCC) of A1 or below. As per the portfolio
constraints, exposures to countries with local currency country
risk ceiling ratings of A1 or below cannot exceed 10%, with
exposures to countries local currency country risk ceiling
ratings of Baa1 to Baa3 further limited to 2.5%. As a worst case
scenario, a maximum 7.5% of the pool would be domiciled in
countries with LCC of A3 and 2.5% in countries with LCC of Baa3.
The remainder of the pool will be domiciled in countries which
currently have a LCC of Aa3 and above. Given this portfolio
composition, the model was run with different target par amounts
depending on the target rating of each class of notes as further
described in the methodology. The portfolio haircuts are a
function of the exposure size to peripheral countries and the
target ratings of the rated notes and amount to 0.375% for the
Class A Notes, 0.25% for the Class B-1 and B-2 Notes, 0.1875% for
the Class C Notes and 0% for Classes D, E and F Notes.

Stress Scenarios:

Together with the set of modelling assumptions above, Moody's
conducted additional sensitivity analysis, which was an important
component in determining the provisional ratings assigned to the
rated notes. This sensitivity analysis includes increased default
probability relative to the base case. Here is a summary of the
impact of an increase in default probability (expressed in terms
of WARF level) on each of the rated notes (shown in terms of the
number of notch difference versus the current model output,
whereby a negative difference corresponds to higher expected
losses), holding all other factors equal:

Percentage Change in WARF: WARF + 15% (to 3105 from 2700)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: 0

Class B-1 Senior Secured Fixed Rate Notes: -1

Class B-2 Senior Secured Floating Rate Notes: -1

Class C Senior Secured Deferrable Floating Rate Notes : -2

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3510 from 2700)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: -1

Class B-1 Senior Secured Fixed Rate Notes: -3

Class B-2 Senior Secured Floating Rate Notes: -3

Class C Senior Secured Deferrable Floating Rate Notes : -3

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: -2


===================
K A Z A K H S T A N
===================


AGRARIAN CREDIT: Fitch Assigns BB+ IDR, Outlook Stable
------------------------------------------------------
Fitch Ratings has assigned Kazakhstan's Agrarian Credit
Corporation (ACC) Long-Term Foreign- and Local-Currency Issuer
Default Ratings (IDRs) of 'BB+' and a National Long-Term Rating
of 'AA(kaz)'. The Outlooks are Stable. Fitch has also assigned
ACC a Short-Term Foreign-Currency IDR of 'B' and senior unsecured
debt ratings of 'BB+'.

Under its Government Related Entities Criteria, Fitch classifies
ACC as an entity credit-linked to the Republic of Kazakhstan
(BBB/Stable/F2). This is supported by regular state support,
largely in the form of capital injections, indirect state
ownership and control via JSC KazAgro National Managing Holding
(KazAgro; BBB-/Positive). Based on Fitch's assessment of the
strength of linkage and incentive to support by the government
Fitch uses a top-down approach, which, irrespective of ACC's
standalone credit profile, leads to a two-notch differential
between the company's ratings and those of the sovereign.

KEY RATING DRIVERS

Status, Ownership and Control Assessed as Strong

ACC is the government's agent authorised to implement government
policy in the agricultural sector. It is indirectly wholly owned
by the republic of Kazakhstan via KazAgro, one of the latter's
seven subsidiaries. ACC was established in 2001 by the Decree of
the republic of Kazakhstan government and operates under general
commercial law. ACC's main task is to provide affordable lending
to agricultural entities with the aim of developing and
diversifying the state's agro-industrial sector.

The state exercises strict control over ACC's activities via
KazAgro, which sets a framework for the debt and dividend policy,
as well as appointing the company's board of directors. The
latter approves management decisions and the company's annual
financial statements. The board of directors includes five
members, two of which are representatives of KazAgro, which is to
ensure that ACC's operations are in line with those adopted by
the state programme for the development of the agricultural
sector. ACC also coordinates its operations with Kazakhstan's
Ministry of Agriculture and The National Bank of Kazakhstan.
Fitch does not expect any dilution in ownership over the medium
term.

Support Track Record and Expectations Assessed as Very Strong
As it is involved in the implementation of several state
programmes, ACC continuously receives different types of
financial support from the state, which includes capital
injections and subsidised debt funding either via KazAgro or
directly from the state. During 2005-2017 ACC received KZT157.6
billion of capital injections, which is equivalent to 64% of the
company's 2017 total assets, earmarked for the implementation of
particular lending programmes, and management expects the flow of
capital injections will be in place over the medium term.

Fitch expects state-originated funding will continue to heavily
dominate ACC's debt structure over the medium term, despite the
company's plans to borrow more actively on the capital markets.
As of end-2017, close to 90% of the company's debt funding was
state-originated and included bonds purchased by KazAgro, loans
from KazAgro and local governments.

Within the framework of "State programme of agro-industrial
development for 2017-2021" ACC acts as an operator of the budget
programme to fund the liquidity gap of agribusinesses by
financing their spring field and harvesting works. For this it
receives an annual short-term loan of KZT60 billion directly from
the state budget at 0.01% interest rate.

Socio-Political Implications of Default Assessed as Strong
The company's main task is to provide affordable funding - both
directly and indirectly - to agribusiness entities. ACC has broad
line of credit products, which serve different categories of
agricultural producers. ACC's main clients are small and medium-
sized agro-business entities, often in remote areas and with weak
collateral, which is not regarded as acceptable by commercial
banks. ACC operates in all of Kazakhstan's regions through a
network of branches and provides loans at lower rates and longer
maturity compared with commercial banks, while also being more
flexible in terms of collateral.

ACC is dependent on regular access to funding, which means that
it would be severely impacted by a default. ACC would likely to
discontinue its operations on providing financing to agro-
business entities in case of default, which would endanger the
provision of affordable lending to agricultural entities,
particularly for small businesses in remote rural areas, and
could cause some social unrest as a significant part of the
county's population is employed in agriculture.

Commercial banks are reluctant to provide funding directly to the
agricultural sector due to industry-related risks and poor
quality of collateral, and thus could hardly act as substitutes
to ACC. There are several potential substitutes for ACC among
KazAgro's other subsidiaries. However, those companies have a
different focus, and it would be impossible to rearrange their
operations in the short term, which would endanger the provision
of affordable lending to agri-business entities.

Financial Implications of Default Assessed as Moderate
Fitch views a default of ACC on its debt obligations as
potentially damaging to the reputation of Kazakhstan, but not of
an irreparable nature. Its entire debt stock is in local
currency, mostly from the parent and the state. As of April 1,
2018, the proportion of market debt accounted for only 6% of
ACC's total debt, represented by KZT10 billion of market bonds
issued in December 2017. This significantly limits default risk
on market debt. In Fitch's view, the proportion of market debt
exposure should remain modest in the medium term, so no change in
assessment is expected. Nonetheless, should ACC pursue change in
funding policy leading to greater share of FX-denominated/market
debt instruments, Fitch could reassess the financial implications
of default.

This assessment under the GRE criteria gives a final score of 30
points and leads to a two-notch differential from the sovereign's
IDRs, irrespective of ACC's standalone credit assessment.

Operating Performance

ACC has been profitable over the last five years. In 2017, the
company recorded a net profit of almost KZT7 billion, which is
2.4x higher than KZT2.9 billion in 2016 due to an expanded loan
portfolio, which increased interest revenue, the company's main
income source. Interest expenditure remains moderate as ACC
broadly enjoys subsidised state-originated funding. ACC expects
to remain profitable over the medium term, in line with its
historical performance.

Funding Structure

ACC has strong capitalisation, with a Fitch-estimated equity-to-
asset ratio of 61.7% at end-2017. This provides a safe margin for
the absorption of potential losses. The company's funding
structure was totally state-originated in 2016 while at end-2017
only 12% of debt was of market origin. The management intends to
interact more actively with financial institutions, including
international ones, over the medium term. Fitch's baseline view
is that this would not lead to a material drop in state-
originated funding, leading to a change in funding structure in
favour of market debt.

RATING SENSITIVITIES

An upgrade may result from an upgrade of the sovereign ratings,
provided that ACC's links to the government are unchanged, or
from tighter integration with the sovereign and subsequent re-
assessment of rating factors.

Changes to ACC's links with the state leading to weaker
integration and hence lesser propensity of support by the
sovereign could lead to wider notching differential, resulting in
a downgrade. Negative rating action on the Republic of Kazakhstan
would also be reflected in ACC's ratings.


=====================
N E T H E R L A N D S
=====================


CADOGAN SQUARE VII: Moody's Rates EUR13.5MM Class F Notes 'B2'
--------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to nine
classes of notes issued by Cadogan Square CLO VII B.V.

EUR 272,000,000 Class A Senior Secured Floating Rate Notes due
2031, Definitive Rating Assigned Aaa (sf)

EUR 14,500,000 Class B-1 Senior Secured Floating Rate Notes due
2031, Definitive Rating Assigned Aa2 (sf)

EUR 15,000,000 Class B-2 Senior Secured Floating Rate Notes due
2031, Definitive Rating Assigned Aa2 (sf)

EUR 20,000,000 Class B-3 Senior Secured Fixed Rate Notes due
2031, Definitive Rating Assigned Aa2 (sf)

EUR 20,500,000 Class C-1 Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned A2 (sf)

EUR 10,000,000 Class C-2 Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned A2 (sf)

EUR 25,500,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned Baa2 (sf)

EUR 27,500,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned Ba2 (sf)

EUR 13,500,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2031, Definitive Rating Assigned B2 (sf)

RATINGS RATIONALE

Moody's definitive ratings of the rated notes address the
expected loss posed to noteholders by the legal final maturity of
the notes in May 2031. The definitive ratings reflect the risks
due to defaults on the underlying portfolio of assets, the
transaction's legal structure, and the characteristics of the
underlying assets. Furthermore, Moody's is of the opinion that
the Collateral Manager, Credit Suisse Asset Management Limited,
has sufficient experience and operational capacity and is capable
of managing this CLO.

The Issuer issued the Class A Notes, the Class B-1 Notes, the
Class B-2 Notes, the Class B-3 Notes, the Class C-1 Notes, the
Class C-2 Notes, the Class D Notes, the Class E Notes and the
Class F Notes in connection with the refinancing of the Class A
Senior Secured Floating Rate Notes due 2029, the Class B Senior
Secured Floating Rate Notes due 2029, the Class C Senior Secured
Deferrable Floating Rate Notes due 2029, the Class D Senior
Secured Deferrable Floating Rate Notes due 2029 and the Class E
Senior Secured Deferrable Floating Rate Notes due 2029,
previously issued on May 19, 2016. The Issuer used the proceeds
from the issuance of the Refinancing Notes to redeem in full the
Refinanced Notes. On the Original Issue Date, the Issuer also
issued EUR 53,650,000 of unrated Subordinated Notes, which will
remain outstanding.

Cadogan VII is a managed cash flow CLO. At least 96% of the
portfolio must consist of secured senior obligations and up to 4%
of the portfolio may consist of unsecured senior loans, unsecured
senior bonds, second lien loans, mezzanine obligations and high
yield bonds. At closing, the portfolio is expected to be close to
90% ramped and comprised predominantly of corporate loans to
obligors domiciled in Western Europe. The remainder of the
portfolio will be acquired during the 3-month initial period
ending in August 2018, in compliance with the portfolio
guidelines.

CSAM will manage the CLO. It will direct the selection,
acquisition and disposition of collateral on behalf of the Issuer
and may engage in trading activity, including discretionary
trading, during the transaction's reinvestment period.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
improved and credit risk obligations, and are subject to certain
restrictions.

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to
pay down the notes in order of seniority.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in August 2017.

Factors that would lead to an upgrade or downgrade of the
ratings:

The performance of the notes is subject to uncertainty. The
performance of the notes is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. The Manager's investment
decisions and management of the transaction will also affect the
performance of the notes.

Loss and Cash Flow Analysis:

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3 of
the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in August 2017.

The cash flow model evaluates all default scenarios that are then
weighted considering the probabilities of the binomial
distribution assumed for the portfolio default rate. In each
default scenario, the corresponding loss for each class of notes
is calculated given the incoming cash flows from the assets and
the outgoing payments to third parties and noteholders.
Therefore, the expected loss or EL for each tranche is the sum
product of (i) the probability of occurrence of each default
scenario and (ii) the loss derived from the cash flow model in
each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios.

The key model inputs Moody's used in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers.

For modeling purposes, Moody's used the following base-case
assumptions:

Target Par Amount: EUR450,000,000

Diversity Score: 52

Weighted Average Rating Factor (WARF): 2850

Weighted Average Spread (WAS): 3.40%

Weighted Average Coupon (WAC): 4.00%

Weighted Average Recovery Rate (WARR): 43.50%

Weighted Average Life (WAL): 8.50 years

As part of its analysis, Moody's has addressed the potential
exposure to obligors domiciled in countries with local currency
government bond ratings of A1 or below. According to the
portfolio eligibility criteria, obligors must be domiciled in a
jurisdiction the Moody's foreign currency government bond rating
of which is "Baa3" or above. In addition, according to the
portfolio constraints, the total exposure to countries with a
local currency country bond ceiling ("LCC") between "A1" and "A3"
shall not exceed 10.0%. As a result, in accordance with its
methodology, Moody's did not adjust the target par amount
depending on the target rating of each class of notes.

Stress Scenarios:

Together with the set of modeling assumptions above, Moody's
conducted an additional sensitivity analysis, which was a
component in determining the definitive ratings assigned to the
rated notes. This sensitivity analysis includes increased default
probability relative to the base case.

Here is a summary of the impact of an increase in default
probability (expressed in terms of WARF level) on the notes
(shown in terms of the number of notch difference versus the
current model output, whereby a negative difference corresponds
to higher expected losses), assuming that all other factors are
held equal.

Percentage Change in WARF -- increase of 15% (from 2850 to 3278)

Rating Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: 0

Class B-1 Senior Secured Floating Rate Notes: -1

Class B-2 Senior Secured Floating Rate Notes: -1

Class B-3 Senior Secured Fixed Rate Notes: -1

Class C-1 Senior Secured Deferrable Floating Rate Notes: -2

Class C-2 Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: -2

Percentage Change in WARF -- increase of 30% (from 2850 to 3705)

Rating Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: -1

Class B-1 Senior Secured Floating Rate Notes: -3

Class B-2 Senior Secured Floating Rate Notes: -3

Class B-3 Senior Secured Fixed Rate Notes: -3

Class C-1 Senior Secured Deferrable Floating Rate Notes: -4

Class C-2 Senior Secured Deferrable Floating Rate Notes: -4

Class D Senior Secured Deferrable Floating Rate Notes: -3

Class E Senior Secured Deferrable Floating Rate Notes: -2

Class F Senior Secured Deferrable Floating Rate Notes: -4


CADOGAN SQUARE VII: Fitch Assigns B-sf Rating to Class F Notes
--------------------------------------------------------------
Fitch Ratings has assigned Cadogan Square VII CLO B.V notes final
ratings, as follows:

EUR272 million Class A: 'AAAsf'; Outlook Stable

EUR14.5 million Class B-1: 'AAsf'; Outlook Stable

EUR15 million Class B-2: 'AAsf'; Outlook Stable

EUR20 million Class B-3: 'AAsf'; Outlook Stable

EUR20.5 million Class C-1: 'Asf'; Outlook Stable

EUR10 million Class C-2: 'Asf'; Outlook Stable

EUR25.5 million Class D: 'BBBsf'; Outlook Stable

EUR27.5 million Class E: 'BBsf'; Outlook Stable

EUR13.5 million Class F: 'B-sf'; Outlook Stable

EUR53.65 million Class M: not rated

Cadogan Square VII CLO B.V. is a cash flow collateralised loan
obligation (CLO). Net proceeds from the notes are being used to
redeem the existing notes, with a new identified portfolio
comprising the existing portfolio, as modified by sales and
purchases conducted by the manager. The portfolio is actively
managed by Credit Suisse Asset management Limited. The CLO
envisages an approximately 4.25-year reinvestment period and an
8.5-year weighted average life (WAL).

KEY RATING DRIVERS

'B' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the 'B'
range. The Fitch-weighted average rating factor (WARF) of the
identified portfolio is 33.2

High Recovery Expectations

At least 96% of the portfolio comprises senior secured
obligations. Fitch views the recovery prospects for these assets
as more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch-weighted average recovery rate (WARR) of the
current portfolio is 63.4%

Interest Rate Exposure

Up to 12.5% of the portfolio can be invested in fixed-rate
assets, while fixed-rate liabilities represent 4.4% of the target
par. Fitch modelled both 0% and 12.5% fixed-rate buckets and
found that the rated notes can withstand the interest rate
mismatch associated with each scenario.

Diversified Asset Portfolio

The transaction features two different Fitch test matrices with
different allowances for exposure to the largest 10 obligors
(maximum 16% and 20%). The manager can then interpolate between
these two matrices. This covenant ensures that the asset
portfolio will not be exposed to excessive obligor concentration.

Limited FX Risk

The transaction is allowed to invest up to 20% of the portfolio
in non-euro-denominated assets, provided these are hedged with
perfect asset swaps within six months of purchase. Unhedged and
principal hedged obligations are limited to 4% of the portfolio
and subject to principal haircuts. Unhedged and principal hedged
obligations can only be purchased if the transaction is above the
reinvestment target par.

RATING SENSITIVITIES

A 125% default multiplier applied to the portfolio's mean default
rate, and with this increase added to all rating default levels,
would lead to a downgrade of up to two notches for the rated
notes. A 25% reduction in recovery rates would lead to a
downgrade of up to four notches for the rated notes.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10

Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

DATA ADEQUACY

The majority of the underlying assets or risk-presenting entities
have ratings or credit opinions from Fitch and/or other
Nationally Recognised Statistical Rating Organisations and/or
European Securities and Markets Authority-registered rating
agencies. Fitch has relied on the practices of the relevant
groups within Fitch and/or other rating agencies to assess the
asset portfolio information.

Overall, Fitch's assessment of the asset pool information relied
upon for the agency's rating analysis according to its applicable
rating methodologies indicates that it is adequately reliable.


CEVA GROUP: S&P Raises Issuer Credit Rating to 'BB-'
----------------------------------------------------
S&P Global Ratings said that it raised its long-term issuer
credit rating on Netherlands-based integrated logistics services
provider CEVA Group PLC (CEVA) to 'BB-' from 'B-'. S&P said, "At
the same time, we removed the rating from CreditWatch, where we
placed it with positive implications on April 16, 2018. We also
assigned our 'BB-' long-term issuer credit rating to CEVA
Logistics AG, a holding company of CEVA. The outlook on both
entities is positive."

S&P said, "In addition, we raised our issue rating on CEVA's
first-lien debt to 'BB-' from 'B-'. Our '4' recovery rating
remains unchanged and indicates our expectation of average (40%-
45%; rounded estimate: 40%) recovery in the event of default.

The upgrade follows CEVA's completion of an IPO on May 8, 2018,
in which it raised Swiss francs (CHF) 1.2 billion (about $1.2
billion). We understand that CEVA will operate with significantly
lower financial leverage by repaying more than 50% of its balance
sheet debt with the total IPO proceeds in June 2018.

"In addition, as part of the IPO, the company exchanged its $953
million payment-in-kind notes and $572 million of preferred
shares for common equity (we previously treated these instruments
as debt). Furthermore, we expect CEVA's interest costs to
diminish to about $70 million from about $178 million prior to
the IPO, which will boost cash flow generation. As a result, we
expect a significant improvement in credit measures, including
S&P Global Ratings-adjusted debt to EBITDA to about 3.0x and
adjusted funds from operations (FFO) to debt to more than 20% by
2019, compared to 9.7x and 3.0%, respectively, prior to the IPO.

"In addition, we understand that CEVA aims to refinance the
outstanding debt, which is currently expensive. By doing so, the
company could reduce its interest costs further and lengthen its
debt maturity profile. That said, we do not factor any debt-
refinancing transactions into our base case because the timing
and conditions of such transactions are uncertain at this stage.

"We believe that CEVA will now be in a better position to unlock
additional business opportunities with existing and new
customers, as it was previously hindered by its weak balance
sheet. While CEVA is currently constrained by many suppliers that
insist on, for example, bank guarantees or cash deposits, we
expect the company to improve its conditions with many of these
suppliers and customers by renegotiating pricing and payment
terms.

"In our view, CEVA's enhanced customer base, greater bargaining
power with counterparties, and better pricing will likely result
in higher and less volatile operating margins, further supported
by the company's demonstrated grip on cost control. We also see
an improvement in operating cash flow driven by lower working
capital requirements as likely. We believe that the company will
be in a better position to invest in information technology (IT)
to remain competitive and serve customers requiring faster and
cheaper services. Together, these factors have led us to revise
our business risk assessment upward to fair from weak."

CEVA's business profile remains constrained by the company's
exposure to the highly fragmented and competitive logistics
industry, with CEVA competing against larger players, which
weighs on its growth prospects and profitability. Although CEVA
seeks to offset operating risk and pricing pressure with long-
term contracts, it is still highly exposed to cyclical swings in
trade volumes and freight rates, which can hit profits during
economic slowdowns.

These weaknesses are partly mitigated by the company's strong
client retention rates and long-standing relationships across
broadly diversified end-markets. In addition, while bidding for
contracts is competitive and can pressure margins, S&P believes
that CEVA will continue reducing its exposure to underperforming
contracts.

S&P said, "The material reduction in debt and new ownership
structure post IPO have led us to revise our assessment of the
financial risk profile upward to the significant category from
the highly leveraged category. As of May 8, 2018, a financial
sponsor no longer controls CEVA. The shareholdings of the
previous majority shareholders Apollo, Franklin, and CapRe, were
diluted by more than 75% and there is no major controlling
financial sponsor owner. Apollo will no longer have control under
the limited liability company agreement and will be a common
shareholder with voting rights limited to its share of 4.6% post
IPO.

"We believe that CEVA has the ability to continue improving its
credit measures, supported by modest EBITDA growth and debt
reduction from free operating cash flow (FOCF). We view
positively CEVA's intention to gradually repay debt in the coming
years, consistent with its target to lower net debt to EBITDA (as
defined by CEVA) to 1.5x by end-2020. That said, we note that
CEVA's newly formulated financial policy has no established track
record."

In S&P's base case, it assumes:

-- For 2018, an increase in net revenues of about 3% for both
    the contract logistics and freight management segments. S&P
    said, "This growth is supported by our estimates of annual
    GDP and inflation growth rates for Europe, the Americas, and
    Asia-Pacific. While the main growth will come from Asia-
    Pacific, we note that the U.S. operations will potentially
    add to growth as the company increases its customer base. We
    expect Europe to be the lowest revenue growth contributor.

-- Growth in revenues of 2.5%-3.0% from 2019, reflecting the
    strong competitive pressures in the highly fragmented
    underlying logistics industry. However, S&P notes that there
    is upside potential on new customer gains, thanks to a
    stronger balance sheet post IPO (S&P does not incorporate
    this into its base case).

-- Cost-cutting initiatives, notably personnel reductions,
    automation, and the termination of unprofitable contracts, to
    improve margins by about 0.2% in 2018. Beyond 2018, S&P's
    forecast a slight 0.1% improvement in margins to reflect
    stabilization in the cost base.

-- A heightened focus on working capital, generating a modest
    inflow in 2018 after an improvement in 2017. S&P projects a
    $10 million inflow, down from $26 million in 2017. The
    improvement incorporates the company's proven ability to
    collect and bill customers faster and its better negotiating
    power with suppliers post IPO.

-- An $18 million dividend inflow from ANJI CEVA, the joint
    venture in China, in 2018. This company has no debt and has
    been stable for the past three years.

-- Capital expenditures (capex) of $80 million-$100 million per
    year, mostly to support revenue growth, with about 30%
    relating to maintenance capex.

-- Further deleveraging, with about $50 million amortizing per
    year.

-- A new dividend policy post IPO. S&P estimates the annual
    payout of about 40% of net income. Accordingly, S&P forecasts
    $25 million in dividends in 2019.

Based on these assumptions, we arrive at the following credit
measures:

-- Adjusted debt to EBITDA of about 3.3x in 2018, improving to
    about 3.0x in 2019, compared with 9.7x in 2017.

-- Adjusted FFO to debt of 18%-19% in 2018, improving to 23%-24%
    in 2019, when the 12-month impact from lower interest
    expenses will take effect, from 3% in 2017.

S&P said, "We view CEVA's liquidity as adequate, based on our
expectation that over the next 12 months, sources will exceed
uses by around 1.4x including the proceeds from the IPO and the
corresponding debt repayment, and by above 4.0x excluding the
proceeds from the IPO and the corresponding debt repayment."

As of Dec. 31, 2017, S&P estimates that liquidity sources for the
upcoming 12 months mainly include:

-- Cash and cash equivalents of $295 million.

-- Availability of $250 million under CEVA's committed long-term
    facilities.

-- Positive inflows from FFO of $160 million (significantly
    better than before the IPO due to lower interest costs).

-- Positive working capital inflow of about $10 million.

-- Proceeds from the IPO of $1.2 billion completed in May 2018.

The main liquidity uses over the same period mainly include:

-- Repayment of $1.2 billion in debt, to be completed in June
    2018.

-- Capex of about $100 million.

The positive outlook reflects the possibility of an upgrade over
the next 12 months if CEVA's FOCF generation and credit metrics
improve further, as the company captures the likely benefits from
its improved credit quality post IPO, and management follows
prudent financial and treasury policies.

S&P said, "We could raise the ratings if we expect adjusted FFO
to debt to improve and stay at more than 25% and debt to EBITDA
below 3.5x, which we estimate could occur if CEVA directs its
FOCF toward debt repayment and improves profitability through
customer-base and sales growth, with better pricing. Such an
improvement in credit measures could be accelerated if CEVA
refinances outstanding debt and lowers its interest expenses,
while capitalizing on its improved credit quality. An upgrade is
also contingent on our increased confidence that any releveraging
event, such as a material debt-funded acquisition or shareholder
remuneration, is remote.

"We could revise the outlook to stable if the company's EBITDA
generation stagnates or deteriorates, for example, because
competition intensifies significantly, resulting in lower debt
reduction and an inability to improve credit ratios commensurate
with a higher rating."


SCHOELLER ALLIBERT: S&P Affirms 'B' ICR, Outlook Stable
-------------------------------------------------------
S&P Global Ratings today affirmed its 'B' long-term issuer credit
rating on Netherlands-registered Schoeller Allibert Group BV
(Schoeller). The outlook is stable.

At the same time, S&P affirmed its issue-level rating on
Schoeller's EUR210 million senior secured notes at 'B'. The
recovery rating on the notes is unchanged at '4', indicating
S&P's expectation of 40% recovery in the event of default.

Brookfield Business Partners L.P. has completed the acquisition
of the majority stake in Schoeller from its former owners,
indirect subsidiaries of JP Morgan. The founding Schoeller family
will continue to hold a minority stake.

The affirmation indicates that, at this stage, we do not
anticipate any material changes to Schoeller's near-term leverage
or strategy. We also understand that the change in ownership has
not led to any additional debt for the acquired group. The
company refinanced its debt in 2016 and now has a simple capital
structure, with EUR210 million senior secured notes maturing in
September 2021. The notes include a change in control clause,
under which the notice period for the bondholders to exit
following the company's announcement expires around mid-June
2018. We also understand that the intragroup loans, which we
added to debt, were eliminated from the capital structure as a
result of the change in ownership and following the
simplification of the organizational structure.

"We anticipate that Schoeller's management will continue to
execute its growth strategy and expand its product offering over
the next few years, which will require higher capital expenditure
(capex). Although the higher capex resulted in negative free
operating cash flow (FOCF) in 2017, we understand that the
company plans to fund its growth largely from internally
generated cash flows, rather than incurring additional debt. This
should enable it to generate positive FOCF from 2018.

"Although we do not incorporate any acquisitions into our base
case at this stage, we understand that it is possible that the
company will complement its organic growth with selected
acquisitions under the new ownership, to gain scale and build on
its wide European and North American presence. The rating impact
will depend on the size, price, and financing, of any
acquisitions, among other things.

"Our assessment of Schoeller's business risk profile reflects the
group's exposure to the fragmented and competitive returnable
transit packaging (RTP) markets of Western Europe and the U.S. In
our view, the shift toward increased use of pooling services in
the industry may put pressure on Schoeller's pricing power.
Although Schoeller delivers to a variety of end-markets,
including industrial manufacturing, retail, food and beverage,
and agriculture, we note that it derives about 20% of its
revenues from a single customer. That said, it has a long-term
contract running until 2022 with this customer and we understand
that the relationship is a long-standing one. Nevertheless,
Schoeller risks losing a significant portion of its earnings, if
it were to lose this customer.

"Schoeller's leading position in the niche RTP market partly
mitigates these weaknesses. In our view, there are some barriers
to entry--an RTP provider is often embedded in an end-user's
logistics process, which means the customer would incur some
switching costs. This factor is gradually becoming more important
due to the rise of pooling in Schoeller's core markets. It is
complemented by Schoeller's widespread manufacturing presence in
Europe, which gives it some competitive edge over some smaller
local producers. Schoeller also benefits from the fact that many
of its end-markets--including food and beverage and retail--
exhibit stable and strong growth trends and are generally less
cyclical. Retail has, however, been a difficult market recently,
as grocery stores in particular have been cutting down costs
substantially.

In the past, Schoeller's profitability has shown volatility as
the company repeatedly optimized its operational and
manufacturing footprint (for example, after the merger with
Linpac Allibert); the company has also seen several changes in
key management roles. Going forward, lean manufacturing and
productivity improvements remain a strategic priority and we
believe that this, combined with Schoeller's ability to pass on
raw material prices (albeit after a delay), should help stabilize
its S&P Global Ratings-adjusted EBITDA margins at around 11%-12%.

S&P's base case assumes:

-- Growth in revenues of 2%-4% in 2018 as the new products start
    contributing to the top line more significantly;

-- No significant extraordinary expense, enabling adjusted
    EBITDA margin to stabilize at 11%-12%;

-- Cash capex of about EUR30 million;

-- No acquisitions/divestments; and

-- No shareholder distributions.

Based on these assumptions, S&P arrives at the following credit
measures:

-- Adjusted debt to EBITDA of below 6x; and

-- Funds from operations (FFO) cash interest coverage of more
    than 2x in the coming few years.

S&P said, "Our stable outlook reflects our expectation that over
the next 12 months Schoeller will post at least stable operating
results, despite the difficult conditions for organic growth, as
its new product program ramps up. This, combined with its sound
liquidity and long-dated debt maturity profile, should help the
company to continue to invest in its growth without increasing
its leverage. We expect Schoeller's FFO cash interest coverage
will remain above 2.0x.

"We could lower the ratings if the company's liquidity position
deteriorates as a result of higher-than-expected litigation
payments. We could also lower the ratings if we were to expect
that management's actions, including the planned investment
program into new products, would not translate into steady EBITDA
growth, or would take longer to materialize. The ratings could
also come under pressure if financial policy decisions weakened
its financial profile or caused financial metrics to deviate
significantly from our expectations.

"A downgrade could also stem from a significant shortfall in
operating performance compared with our base case. This could
occur as a result of loss of key customers; operational
disruptions; or difficult macroeconomic conditions, such that
earnings and cash flow generation led to weaker liquidity or FFO
cash interest coverage fell below 2x.

"We could raise the ratings if the company showed a higher-than-
expected improvement in profitability, leading to stronger credit
metrics in line with levels we view as commensurate with an
aggressive financial risk profile over a sustained period.
Specifically, this would include a ratio of adjusted FFO to debt
of more than 15% and debt to EBITDA of less than 4.5x, on a
sustained basis, supported by the group's owners committing to a
financial policy commensurate with these metrics."


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R O M A N I A
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BANCA TRANSILVANIA: Fitch Hikes Long-Term IDR to BB+
----------------------------------------------------
Fitch Ratings has upgraded Banca Transilvania S.A.'s (BT) Long-
Term Issuer Default Rating (IDR) to BB+' from 'BB'. At the same
time, it has affirmed the Long-Term IDRs of Banca Comerciala
Romana S.A. (BCR) and BRD-Groupe Societe Generale S.A. (BRD) at
'BBB+' and of UniCredit Bank S.A. (UCBRO) at 'BBB-'. The Outlooks
are Stable.

Fitch has also upgraded the Viability Ratings (VRs) of BT to
'bb+' from 'bb' and of UCBRO to 'bb' from 'bb-'. BCR's VR has
been affirmed at 'bb+'.

KEY RATING DRIVERS

IDRS, SUPPORT RATINGS

The IDRs of BT are driven by its standalone creditworthiness, as
expressed by its VR. The upgrade of the Long-Term IDR of the bank
reflects the upgrade of its VR. The Support Rating of '5' and
Support Rating Floor of 'No Floor' for BT reflect Fitch's view
that sovereign support for senior creditors, while possible, can
no longer be relied upon, as for most other commercial banks in
the European Union, following the adoption of the Bank Recovery
and Resolution Directive.

BCR's, BRD's and UCBRO's Long- and Short-Term IDRs and Support
Ratings are based on potential support available from their
respective parents - Erste Group Bank AG (Erste, A-/Stable),
Societe Generale S.A. (SG; A/Stable) and Unicredit SpA (UCB;
BBB/Stable).

In Fitch's view, Erste, SG and UCB will continue to have a high
propensity to support their Romanian subsidiaries because Romania
and the wider central and eastern European region remain
strategically important for each of them. This view also takes
into account these banks' majority ownership, the high level of
operational and management integration between the banks and
their parents, the track record of support to date and the
limited size of the subsidiaries relative to their parents,
making potential support manageable.

BCR's and UCBRO's IDRs are notched down once from their
respective parents'. The Stable Outlook on BCR's Long-Term
Foreign-Currency IDR, which is at the level of Romania's Country
Ceiling (BBB+), reflects the Stable Outlooks on Romania and on
Erste. The Stable Outlook on UCBRO's IDR is in line with that on
its parent.

BRD could be rated within one notch of its parent, but the extent
to which its Long-Term Foreign-Currency IDR can benefit from
parental support is currently constrained by Fitch's assessment
of transfer and convertibility risks as reflected by Romania's
Country Ceiling. The Stable Outlook on BRD reflects that on the
Romanian sovereign.

VRs

The upgrades of BT's and UCBRO's VRs and affirmation of BCR's VR
reflect a supportive domestic operating environment driving an
improvement in the banks' credit profiles and reasonable
financial performance.

The upgrade of BT's VR factors in the bank's decreased levels of
problem exposures, driven by write-offs, and a track record of
solid profitability helping to offset potential capital pressures
resulting from aggressive growth (including recent acquisitions)
and normalised levels of impairment charges. The upgrade further
reflects Fitch's view that the recent acquisition and subsequent
merger with Bancpost will reinforce BT's franchise in core
customer segments and bring scale benefits. Fitch expects that
the transaction will have no major impact on BT's asset quality
and funding profile. Negative impact on capitalisation is likely
to be limited and temporary.

UCBRO's strengthened capitalisation, also in light of the lower
levels of problem assets, was the main factor driving the upgrade
of the bank's VR. It should help relieve pressures from upcoming
increases in regulatory requirements through the phasing-in and
introduction of new CET1 buffers and from the planned
implementation of advanced internal ratings-based approach for
certain portfolios.

The VRs of all three banks also reflect their solid capital
buffers and reasonable reserve coverages of existing problem
loans (stronger at BCR). Funding profiles are stable at all three
banks and liquidity is comfortable.

BCR

BCR's VR reflects the bank's strong capitalisation and funding
and liquidity profiles, which help mitigate risks from the bank's
remaining stock of legacy non-performing assets. The bank's
retail-oriented universal banking business model and leading
market shares (14% of gross loans,) are a rating strength, but
the bank's domestic focus makes BCR susceptible to the operating
environment. This makes an upgrade unlikely.

The risk from the bank's stock of legacy impaired loans has
decreased over the years as the bank has decreased its non-
performing loan (NPL) ratio to 8% and increased total IFRS
reserve coverage to a high 94% of NPLs at end-2017. Fitch
includes impaired loans exposure and more than 90 days past due
but not impaired as NPLs. In 1Q18 the IFRS 9 NPL ratio (Stage 3
and POCI loans) dropped to 7.7%. Fitch expects further reduction
in the NPL ratio towards 5%, over the next two years driven by
further in-house work-outs and moderate inflows of new NPLs, and
a return to gross loans growth.

Operating profits have been supported by low loan impairment
charges (LICs), which Fitch expects will gradually normalise at a
higher level than the 9bp of gross loans and 3% of pre-impairment
operating profit incurred in 2017. BCR's operating income is
under pressure from lower margins following voluntary repricing
of customer loans and from large liquidity holdings, so we expect
the bank to target moderate growth to boost its revenue base.
Efficiency remains a weakness compared with other banks in the
sector, and is likely to remain under pressure from rising wages
and investments in technology. In the longer term the bank is
looking to offset these through increased automation and
digitalisation.

Fitch views the bank's capitalisation as strong, with a Fitch
Core Capital (FCC) ratio of 20% at end-2017, though some downward
pressure is expected from a planned switch to an internal
ratings-based approach to calculating risk-weighted assets (RWA).
Its end-2017 FCC ratio included the full 2017 profit, 40% of
which will be distributed to the parent after several years of
forfeiting dividends in order to strengthen the bank's
capitalisation. In the longer term, Fitch expects regulatory
capitalisation to be managed with a view to maintaining the CET1
ratio comfortably above all requirements, which are fairly high
given an O-SII buffer of 1% and an additional expected systemic
risk buffer of 1% from June 2018.

The bank has a sound funding profile, where customer deposits
represent a high 86% of total funding excluding derivatives, and
reliance on parent funding has decreased. Liquidity is
comfortable with holdings of cash and unencumbered Romanian
government securities, net of mandatory reserves and potential
cash uses equivalent to a high 36% of customer deposits at end-
1Q18.

BT

BT's VR factors in the bank's strong franchise in the domestic
market, helped by acquisitions, and a record of through-the-cycle
profitability that is more resilient than peers'. Strong internal
capital generation and reasonable asset quality have underpinned
BT's ability to grow at times when peers were deleveraging.
Strong capital generation is also expected to counterbalance
temporary capital pressures arising from the planned
consolidation in 2018 of the recently acquired smaller Romanian
retail lender Bancpost. The latter could contribute around 18% of
combined assets, while adding around 3% to BT's current 13.9%
share in sector assets. Bancpost's predominately retail lending
and funding profile fits well with BT's business model. The
acquisition will reinforce BT's franchise in the core retail
business segment (52% and 62% of BT's loans and deposits at end-
2017).

BT's pre-impairment profitability remained solid in 2017-1Q18,
underpinned by lower funding costs and strong fee generation.
Good operational efficiency and lower LICs supported the bottom
line results (return on average assets (ROAA) and equity (ROAE)
of 2.6% and 21.7%, respectively, in 1Q18). Fitch expects the
bank's pre-impairment results to remain strong, benefitting from
greater economies of scale as a result of Bancpost's
consolidation, while performance metrics will be sensitive to
asset quality trends. Fitch estimates that on a combined basis,
operating profit (taking into account budgeted LICs, capturing
potential IFRS 9 effects) could be equal to a solid 3% of
forecast RWAs in 2018.

Impaired loans (as defined by IFRS standard) decreased to 8.2% of
BT's loans at end-2017 from 10.7% at end-2016, driven by write-
offs and in-house recoveries, rather than NPL sales as pursued by
peers. At end-2017, coverage of impaired loans by total reserves
was reasonable at 71%. Bancpost's reported impaired loans were
7.1% of end-2017 loans, with moderate 47% coverage by reserves.
Fitch estimates that on a combined basis, asset quality metrics
would be similar to those of BT, while the bank is targeting
further reduction in problem assets with a regulatory non-
performing exposure ratio (NPE, EBA definition) closer to 5% by
end-2018 from 6.4% at end-1Q18. Concentration risks remain
limited given the bank's profile of SME and retail lender, while
FX lending will only marginally increase to 24% of total loans on
a combined basis (vs. 21% pre-acquisition and the sector average
of 37% at end-2017). Unreserved impaired loans were moderate at
around 12% of FCC adjusted for expected dividend (15% on a
combined basis).

The FCC ratio was solid at 17.4% at end-1Q18 and regulatory CET1
and total capital ratios were 17.3% and 18.2%, respectively (all
net of expected dividends and excluding 1Q18 profit). The planned
consolidation of Bancpost, which will result in a 17% increase in
RWAs from end-1Q18, will, according to Fitch's estimate,
temporary decrease FCC by 3pp to 15.3% and CET1 ratio by 2pp to
15.1% (excluding 2018 profits). The expected profit in 2018
should help to restore solvency ratios to the current levels,
although it will depend on the bank's growth targets and capital
distribution plans. BT intends to manage its capital ratios with
comfortable buffers above growing regulatory capital requirements
(which include the introduction of additional systemic risk
buffer at 1% of RWAs from end-June 2018), but also considering
the potential impact of the implementation of IFRS9 accounting
standards (not yet finalised).

BT's funding profile remains stable and the bank's deposit
franchise is strong (customer deposits accounted for about 93% of
total funding at end-1Q18). BT's liquidity cushion is large,
comprising a significant amount of Romanian government bonds (31%
of assets at end-1Q18), which are eligible for the refinancing
with the National Bank of Romania. Net of potential cash uses and
mandatory reserves, the liquidity buffer was equal to a solid 46%
of customer accounts.

UCBRO

Fitch expects the bank's FCC ratio to increase by 1pp-2pp from
13.4% at end-2017 following the capital increase completed in
1Q18, which has in part been offset by the impact of higher risk-
weightings for EUR-denominated sovereign and national bank
exposures, and by transition to IFRS9 effective as of the start
of 2018. Even at this higher level, capitalisation remains at the
lower end of peers', particularly in view of higher unreserved
impaired loans. Fitch's assessment, however, factors in available
ordinary support, if needed, from the parent, as demonstrated by
the reinvestment of dividends and recent capital injection.

Asset quality has improved over the last years, in line with the
sector, with the bank's impaired loans ratio improving to 8.3% at
end-2017 from 13.5% at end-2016 (including 90 days past due but
not impaired), driven partly by the curing of a large non-
performing exposure. Coverage with IFRS reserves has also
improved to a moderate 75%.

Profitability is supported by gross loans growth, across all
segments, but particularly in unsecured retail lending (up 25%)
through a specialised subsidiary, in line with UCBRO's strategy
to increase the weight of this business in its mix. Impairment
charges for loans and off- balance sheet credit commitments
continue to absorb a significant share of UCBRO's pre-impairment
profit (45% in 2017 according to Fitch's calculation), reflecting
a less aggressive approach to cleaning up the loan book than some
of the peers over the last few years.

UCBRO's gross loans are increasingly funded by customer deposits,
as evidenced by a decreasing customer loans-to-deposits ratio, to
105% at end-2017 from 116% at end-2016, which nonetheless remains
higher than at rated peers. At the same time, corporate deposits
are more prevalent in the bank's funding structure, although the
bank's commercial efforts are directed at increasing the retail
customer base, which should help the bank attract a higher share
of more granular deposits over time. Available liquidity
consisting of cash (including high mandatory reserves),
unencumbered liquid assets and available credit lines covered 54%
of customer deposits at end-2017. Although the bank has cancelled
the emergency liquidity line it had in place from the group,
Fitch expects ordinary liquidity support from the parent, to
continue to be available, if needed.

RATING SENSITIVITIES

IDRS, NATIONAL RATINGS AND SENIOR DEBT

BCR's and UCBRO's IDRs are mainly sensitive to the ability and
propensity of their parent banks to provide support if needed.
BCR's Long-Term IDR could only be upgraded if both Romania and
Erste are upgraded; conversely, they would be downgraded if
either Romania or Erste is downgraded.

BRD's Long-Term IDRs are mainly sensitive to changes to the
Romanian Country Ceiling. A one-notch change in the SG's ratings
would likely have no impact on BRD's IDR.

BT's IDRs are sensitive to the same factors that drive the bank's
VR.

VR

Upside for Romanian banks' VRs above the 'bb' category is limited
given Fitch's assessment that the operating environment in
Romania remains fairly volatile and vulnerable to external
shocks, despite a cyclical upswing currently supporting the
banks' financials.

A further upgrade of UCBRO's VR would require further reduction
in problem assets and improved profitability, while maintaining
adequate capitalisation and liquidity and a moderate risk
appetite.

The VRs of all three banks could be downgraded if the weaker
operating environment or a material increase in risk appetite
translates into marked deterioration in the banks' asset quality
and capital metrics.

The rating actions are as follows:

Banca Comerciala Romana S.A.
Long-Term Foreign-Currency IDR: affirmed at 'BBB+', Outlook
Stable
Short-Term Foreign-Currency IDR: affirmed at 'F2'
Long-Term Local-Currency IDR: affirmed at 'BBB+', Outlook Stable
Support Rating: affirmed at '2'
Viability Rating: affirmed at 'bb+'

Banca Transilvania S.A.
Long-Term Foreign-Currency IDR: upgraded to 'BB+' from 'BB',
Outlook Stable
Short-Term Foreign-Currency IDR: affirmed at 'B'
Viability Rating: upgraded to 'bb+' from 'bb'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'

UniCredit Bank S.A.
Long-Term Foreign-Currency IDR: affirmed at 'BBB-', Outlook
Stable
Short-Term Foreign-Currency IDR: affirmed at 'F3'
Support Rating: affirmed at '2'
Viability Rating: upgraded to 'bb' from 'bb-'

BRD-Groupe Societe Generale S.A.
Long-Term Foreign-Currency IDR: affirmed at 'BBB+', Outlook
Stable
Short-Term Foreign-Currency IDR: affirmed at 'F2'
Support Rating: affirmed at '2'


===========
R U S S I A
===========


KOKS PJSC: S&P Alters Outlook to Stable & Affirms 'B' ICR
---------------------------------------------------------
S&P Global Ratings said that it revised its outlook on Russia-
based metallurgical coke and pig iron producer Koks PJSC to
stable from positive. S&P affirmed its 'B' long-term issuer
credit rating on the company.

In addition, S&P affirmed its 'B' issue rating on Koks' senior
unsecured bond.

S&P said, "The outlook revision reflects our expectation that
Koks will achieve weaker improvements in credit metrics over
2018-2019 than we had previously expected, with funds from
operations (FFO) to S&P Global Ratings-adjusted debt not reaching
30%.

Despite an almost 30% increase in Koks' annual coal production in
2017, the output was lower than expected initially: 2.8 million
tonnes compared to roughly 4 million tonnes. This was mainly due
to the delayed start of the second stage of the Butovskaya and
Tikhova mines, followed by operational issues at the former mine
affecting the speed of the ramp-up. We have therefore revised our
base case and now assume more gradual growth in coal output in
2018-2019.

At the same time, Koks has been able to benefit from the
favorable situation in its core pig iron and metallurgical coke
markets. Thanks to strong prices, Koks' revenues were up by more
than 30% in 2017, reaching Russian ruble (RUB) 85 billion and
driving EBITDA to roughly RUB17 billion. Koks' own coal output
helps it reduce its reliance on external supplies of this raw
material for its coke and pig iron divisions, thereby reducing
costs. However, the production of coal in 2017 was not as high as
Koks initially expected, translating into only a slight increase
of the EBITDA margin to about 20% in 2017, compared to 18.5% in
2016 and our previous expectations of more than 20%.

We now forecast a more gradual increase in Koks' coal production
to more than 4 million tonnes in 2019. This will continue to
improve the company's cost position, albeit at a slower pace than
we previously expected. In terms of the main products that Koks
sells, we anticipate a steady increase in the production of pig
iron as the company brings its refurbished blast furnace into
operation. This will further support Koks' already significant
position in the worldwide pig iron market, of which it holds
roughly 15%.

Our base case assumes:

-- Pig iron production growth of no more than 5% on average over
    2018-2019;
-- Flat coke production in the next few years;
-- Increasing coal production of slightly more than 5% in 2018
    and more than 30% in 2019, on the back of the ramp-up of the
    Tikhova mine and the second stage of the Butovskaya mine;
-- Strong demand for pig iron and coke, leading to slightly
    higher prices in 2018 compared with 2017, followed by a
    decrease of roughly 5%;

-- EBITDA margin of slightly more than 20% in 2018, reaching
    more than 25% in 2019. This compares to about 20% in 2017;

-- Increase in annual EBITDA of roughly 5% in 2018, followed by
    25% growth in 2019 on the back of stronger margins;

-- Capital expenditure (capex) needs of slightly more than RUB10
    billion on average per year in 2018-2019 to support the
    expansion of the KMAruda iron ore mine, along with other
    projects;

-- Loans to the Tulachermet-Stal steel-making plant of no more
    than RUB7.5 billion in 2018; and

-- Zero dividends in 2018.

Based on these assumptions, S&P arrives at the following credit
measures:

-- FFO to adjusted debt of slightly less than 20% in 2018, going
    up to about 25% in 2019;

-- Adjusted debt to EBIDA of slightly more than 3.0x in 2018 and
    below 3.0x in 2019; and

-- Moderately positive free operating cash flow (FOCF) of about
    RUB1.5 billion per year, translating into FOCF to adjusted
    debt of below 5% in 2018-2019.

The rating continues to take into account potential projects that
Koks may get involved in and that may increase its leverage. For
example, Koks is an active participant in the Tulachermet-Stal
project, to which it has already provided loans and will provide
further loans in 2018. This steel-making plant has a potential
capacity of about 1.7 million tonnes and is due to launch in mid-
2018. If Koks consolidated the project in its financial
statements, this could potentially increase its leverage metrics,
which we reflect in our negative view of Koks' financial policy.

Koks' business position is supported by its strong position in
the international pig iron market, with a diverse set of
customers in the U.S., Europe, the Middle East, and Asia. At the
same time, Koks' production facilities are located only in
Russia, and bear the risks of operating in this country. In
addition, Koks' presence in the pig iron, coke, and coal markets
exposes it to the high volatility of these materials' prices.

S&P said, "In our view, Koks' liquidity has improved to adequate
from our previous assessment of less than adequate, reflecting a
ratio of sources to uses of roughly 2.3x for the 12 months from
April 1, 2018. This was mainly possible thanks to the credit
lines the company signed with banks, RUB30 billion of which we
see as committed. Despite the ratio of sources to uses being more
than 1.5x, we do not see liquidity as strong due to Koks' past
record of aggressive liquidity management."

S&P forecasts that the company's liquidity sources for the 12
months started April 1, 2018, will include:

-- Cash and short-term cash equivalents totaling about RUB7.7
    billion;

-- About RUB30.0 billion available under committed credit lines;
    and

-- Expected FFO of about RUB11.4 billion.

Principal liquidity uses for the same period comprise:

-- Debt maturities of about RUB10.0 billion;
-- Maintenance and committed capex of about RUB6.0 billion; and
-- Additional investments in noncore projects of about RUB5.6
    billion.

Koks is subject to certain covenants, of which the strictest is a
maintenance covenant that limits debt to EBITDA to 4.0x. As of
March 31, 2018, we estimated the company's headroom above this
covenant at about 20%, which in our view is adequate.

S&P said, "The stable outlook reflects our view that Koks will
continue ramping up its coal production to about 4 million tonnes
by 2019.

"With the increased coal output, Koks aims to improve its self-
sufficiency in this raw material, supporting its significant
position in the worldwide pig iron market. We expect that this
will help Koks to improve its FFO to adjusted debt to about 25%
by 2019 (from 16% in 2017), which we view as adequate for the
current rating.

"We could upgrade Koks if we saw much quicker improvements in
earnings and cash flow generation than we expected on the back of
coal production growth, such that FFO to adjusted debt increased
to more than 30% on a sustainable basis. This could also be
possible if the market situation proves better than we
anticipate, reflecting much stronger pig iron and metallurgical
coke prices.

An improvement in credit metrics might also occur if Tulachermet-
Stal started repaying the loans that Koks has provided to it. In
addition, an upgrade is contingent on Koks having adequate
liquidity.

"We could lower the rating if Koks' FFO to adjusted debt drops
below 12%. This could be a result of materially lower prices,
much higher capex, or oversupply in the key markets, leading to
declines in sales, none of which we expect in the medium term.
Further downside risk could stem from a deterioration in
liquidity if the company relied greatly on short-term debt, or if
it made unexpected material acquisitions, which are not part of
our base case."


VENTRELT HOLDINGS: Fitch Affirms 'BB-' LT IDRs, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed Ventrelt Holdings Ltd's Long-Term
Foreign and Local-Currency Issuer Default Ratings (IDR) at 'BB-'
with a Stable Outlook.

The ratings reflect the solid operational and financial profiles
of Ventrelt, which Fitch expects to be maintained over 2018-2022.
This is due to the stable operations of Ventrelt as a water and
wastewater operator, favourable tariffs growth, moderate capex, a
planned zero dividend policy, as well as a comfortable debt
maturity and liquidity profile. However, the ratings are
constrained by the group's limited size and diversification
relative to larger peers and 'BB' rated Russian companies, as
well as an evolving regulatory framework for tariff-setting.

KEY RATING DRIVERS

Solid Financial Profile: Ventrelt's financial profile is
supported by healthy tariff growth, small capex needs and a
planned zero dividend policy. The group has been free cash-flow
(FCF)-positive over the last four years. Fitch expects the
group's funds flow from operations (FFO) adjusted net leverage
(net of connections fees) to average around 2.4x over 2018-2022
(0.6x in 2017), which is comfortably within Fitch's negative
rating guideline for leverage of 4.0x. Fitch also expects it to
remain comfortably within the bank loan covenant of net
debt/EBITDA of under 3.0x.

Evolving Regulatory Environment: Despite the approval by regional
regulators of long-term tariffs for all of Ventrelt's water
channels until 2019, the regulator has the right to revise
tariffs annually. Fitch expects the 2019-2022 tariffs to be
capped by inflation. Thus tariffs lack long-term predictability
and may not be free from political interference.

The regulatory environment is key in justifying the several
notches between Ventrelt's rating and the ratings of central
European peers, the latter of which benefit from a record of
predictable tariff changes. Ventrelt, however, has a longer track
record of regulatory environment than that of Georgian Water and
Power LLC (GWP; BB-/Stable), which has failed to see tariff
growth since 2010, while the regulator only launched the
regulatory asset base (RAB) tariff system from the beginning of
2018.

Favourable Tariff Growth: Fitch expects Ventrelt's tariffs to
grow on average 4% in 2019-2022, which will support the group's
credit profile. During 2011-2017 average tariff growth for
Ventrelt was slightly above inflation, which was still supportive
against the backdrop of the government's efforts to curb natural
monopolies' tariffs. Water and wastewater services face less
pressure than heat and electricity as they make up a small share
of the overall utilities bill for households.

Tver Vodokanal Disposal: In March 2018 Ventrelt transferred its
75% stake in Tver water channel, which accounted for less than
10% of Ventrelt's water supply and wastewater volumes in 2017 and
for around 6% of EBITDA, to the local municipality. This followed
its rent agreement break-up with Tver after local authorities
decided to change the strategy of running water and wastewater
facilities of Tver city. Ventrelt's losses from the suspension of
operations in Tver were limited, but the rent agreement break-up
underlines their higher-risk nature compared with concession
agreements, which provide better tariff visibility and clearer
cooperation with local municipalities.

Expansion Strategy: Ventrelt's strategy envisages further
expansion into five or six Russian cities with at least 200,000
residents. The group plans to participate in concession auctions
held by municipalities. In 2018 it plans to participate in a
tender in Chelyabinsk, the seventh-largest city in Russia with
1.2 million inhabitants.

Fitch views enhancing the scale of Ventrelt's business as credit-
positive. Fitch expects M&A activity will not require large cash
outflows as Ventrelt will participate in tenders for concession
agreements. In a concession tender the bidders present their
business plans for the asset and the winner is chosen depending
on the balance of proposed tariff growth, planned investments and
expected efficiencies.

Consolidated Approach: Fitch continues to rate Ventrelt as a
consolidated group since the company is centrally managed and has
also 100% ownership of five out of six water channels comprising
83% of Ventrelt's EBITDA in 2017.

Currently there is no debt at the holding company level and all
debt is located at opcos. At end-2017 one of Ventrelt's opcos
Krasnodar Vodokanal LLC, which contributes around one third of
the group's EBITDA, had provided sureties for all the debt of
another opco RVK-Voronezh LLC (c. 16% of group EBITDA) and the
intermediate holding company UK Rosvodokanal. There were no other
sureties within the group following the repayment of Ventrelt's
domestic bonds in December 2017. In addition, existing bank debt
covenants contain cross-default clauses, i.e. each bank has
cross-default clauses among all the water channels it finances.

Simpler Group Structure: Ventrelt plans to liquidate two
intermediary Cyprus-domiciled companies so that cash flows from
opcos will be accumulated by a Russian-based holding company
directly controlled by the rated Luxemburg-domiciled parent
company. UK Rosvodokanal will also decrease management fees paid
by water channels and upstream cash via dividends. This will
simplify the group structure and cash flows within the group.

DERIVATION SUMMARY

The regulatory environment and approach to asset ownership are
the key factors justifying the two-to-five notch differences
between Ventrelt's rating and the ratings of central European
peers, Polish Aquanet S.A. (BBB+/Stable) and Czech Severomoravske
vodovody a kanalizace Ostrava a.s. (SmVaK, BB+/Stable) although
both competitors have higher leverage. Aquanet and SmVaK are
owners of their assets and benefit from a track record of
predictable tariff changes, while Ventrelt leases its assets, and
its tariffs are less predictable.

Ventrelt is rated the same as GWP since its stronger asset
quality, larger size and stronger regulation in Russia are
compensated by GWP's asset ownership and simpler group structure.
Ventrelt's financial profile is strong compared with peers and
the company has comfortable leverage headroom within its rating.

KEY ASSUMPTIONS

Fitch's Key Assumptions within its Rating Case for Ventrelt:
  - Moderate decline in volumes of water supply and drainage of
around 1% annually in 2019-2022 due to economic measures and
expansion of water metering

  - Average tariff growth for water supply and drainage of 2.5%
and 5.2% in 2018 and at inflation rate (4%) in 2019-2022

  - Inflation of 2.6% in 2018 and 4% thereafter, operating
expenses increasing slightly below inflation

  - Capital expenditures in line with management's forecasts

  - No dividend payments

RATING SENSITIVITIES

The rating sensitivities were switched to FFO-based metrics from
EBITDA-based ratios to bring Ventrelt's guidelines in line with
Fitch-rated peers.

Developments That May, Individually or Collectively, Lead to
Positive Rating Action

  - Increased revenue and earnings visibility following the
implementation of long-term tariffs

  - Sustainable positive FCF generation

Developments That May, Individually or Collectively, Lead to
Negative Rating Action

  - Significant deterioration of the credit metrics on a
sustained basis (FFO adjusted net leverage (excluding connection
fees) above 4.0x and FFO fixed charge cover (excluding connection
fees) below 3.0x) due to, for example, low tariff growth,
insufficient to cover inflationary cost increases, or elevated
borrowing costs not compensated by capex cuts.

  - A sustained reduction in cash generation through a worsening
operating performance or deteriorating cash collection.

LIQUIDITY

Comfortable Liquidity: At December 31, 2017 Ventrelt had adequate
liquidity of RUB4.1 billion of cash and cash equivalents and
RUB3.2 billion of unused credit facilities to cover current debt
maturities of RUB1.4 billion. Its RUB3 billion local bonds were
fully repaid in December 2017, by increasing indebtedness at
opcos level (to RUB4.8 billion at end-2017) and from own funds.
At end-2017 all outstanding loans were denominated in Russian
roubles.

FULL LIST OF RATING ACTIONS

Ventrelt Holdings Ltd:
Long-Term Foreign and Local Currency IDRs: affirmed at 'BB-';
Stable Outlook.

RVK-Finance LLC (wholly-owned indirect subsidiary of Ventrelt
Holdings Ltd):
Local-currency senior unsecured 'BB-' rating: withdrawn as RUB3
billion local bonds were repaid early.


=========
S P A I N
=========


ABANCA CORPORACION: Moody's Hikes LT Deposit Ratings to Ba2
-----------------------------------------------------------
Moody's Investors Service has upgraded ABANCA Corporacion
Bancaria, S.A.'s (Abanca) long-term deposit ratings to Ba2 from
Ba3. The outlook on the long-term deposit ratings has been
changed to positive from stable. The rating agency has also
upgraded (1) the bank's baseline credit assessment (BCA) and
adjusted BCA to ba2 from ba3; and (2) the bank's Counterparty
Risk Assessment (CR Assessment) to Baa3(cr)/Prime-3(cr) from
Ba1(cr)/Not Prime(cr).

Abanca's Not Prime short-term deposit ratings were unaffected by
Moody's rating action.

The rating action was prompted by Moody's assessment of Abanca's
further materially strengthened financial profile primarily from
the bank's improving asset risk metrics, a trend that Moody's
expects to continue supported by Spain's favourable economic
performance which is also reflected in the positive outlook on
the bank's ratings.

RATINGS RATIONALE

RATIONALE FOR UPGRADING THE BCA

The upgrade of Abanca's BCA to ba2 from ba3 reflects the bank's
improved credit profile, primarily in terms of asset risk. In
2017, Abanca materially reduced the volume of non-performing
loans (NPLs), which translated into a decline in the NPL ratio to
5.1% in December 2017 from 7.6% in December 2016. Although at
more modest rates, NPLs continued declining in the first quarter
of 2018, further reducing the NPL ratio to 5.0% as of end-March
2018.

Although asset risk improvement has been less material in terms
of repossessed real estate assets, which just reduced by 3% in
2017, the bank's broader problematic asset ratio (which combines
NPLs and real estate assets) still reduced to 9.2% from 12.0%
over the period. Moreover, a large share of the bank's real
estate assets (almost 30% of the total stock) are under rental
agreements, which are not subject to provisioning requirements
and provide a stable source of revenue to the bank.

In upgrading Abanca's BCA to ba2, Moody's has incorporated its
expectation of a further improvement in the bank's asset risk, on
the back of Spain's sound economic growth prospects (the rating
agency expects GDP to grow by 2.7% in 2018).

The upgrade of Abanca's BCA also reflects the bank's improved
liquidity profile, with a large retail deposit base covering an
increasing share of the bank's funding needs (77% as of end-March
2018). Moody's expects the bank to continue funding its business
primarily through customer deposits, and hence maintaining a low
reliance on market funding. Also positively, the stock of liquid
assets increased in 2017, as the bank rebuilt its securities
portfolio after a substantial part of it was redeemed as of year-
end 2016.

Despite the mentioned improvements, Abanca's BCA of ba2 also
reflects the entity's weak recurring profitability, with a pre-
provision income (PPI) over tangible assets ratio of 0.5% in 2017
and top-line earnings highly reliant on non-recurrent capital
gains. Moreover, bottom-line earnings have been supported by the
release of loan-loss provisions in 2016 and 2017, which Moody's
does not see as a sustainable source of revenue. In addition and
despite recent improvement, Abanca shows a weak capital position,
with Moody's key capital metric Tangible Common Equity at 8.2% as
of end-December 2017. The bank has a large exposure to deferred
tax assets (which represented around 80% of the common equity
tier 1 capital as of end-2017) that Moody's considers a low-
quality form of asset and which weighs on the bank's capital
assessment. From a regulatory perspective, Abanca shows a more
comfortable capital position, with a Common Equity Tier 1 ratio
of 15.6% as of end-March 2018.

RATIONALE FOR UPGRADING THE DEPOSIT RATINGS

The upgrade of Abanca's long-term deposit ratings to Ba2 from Ba3
reflects: (1) The upgrade of the bank's BCA and adjusted BCA to
ba2 from ba3; (2) the result from the rating agency's Advanced
Loss-Given Failure (LGF) analysis which results in an unchanged
no uplift for the deposits ratings; and (3) Moody's assessment of
low probability of government support for Abanca, which results
in no uplift for the deposit ratings.

The outcome of Moody's LGF analysis reflects some vulnerabilities
because of the bank's low volume of senior and subordinated debt,
which could indicate a higher level of loss given failure for
deposits and therefore challenge the upgrade of the deposit
ratings. However, by affirming the deposit ratings, the rating
agency has factored in its expectation that Abanca will have to
issue debt over the coming years in order to meet minimum
requirement for own funds and eligible liabilities (MREL),
whereby the requirements will yet have to be formally established
by regulatory authorities. Under Moody's Advanced LGF analysis,
any issuance of senior or subordinated debt would reduce the
level of loss given failure faced by deposits, thereby
strengthening the presently applicable zero uplift for Abanca's
deposit ratings.

RATIONALE FOR UPGRADING THE CR ASSESSMENT

As part of Moody's rating action, Moody's has also upgraded the
CR Assessment of Abanca to Baa3(cr)/Prime-3(cr) from Ba1(cr)/Not-
Prime(cr), two notches above the adjusted BCA of ba2. The CR
Assessment is driven by the banks' adjusted BCA, low likelihood
of government support and by the cushion against default provided
to the senior obligations represented by the CR Assessment by
subordinated instruments amounting to 7.8% of tangible banking
assets.

RATIONALE FOR THE POSITIVE OUTLOOK

The outlook on Abanca's long-term deposit ratings is positive,
reflecting the positive pressure that could develop on its
ratings if the improving trend observed on the bank's credit
fundamentals -- primarily in terms of asset risk and reliance on
market funding -- consolidates over the next 12-18 months.

WHAT COULD CHANGE THE RATING - UP

Abanca's BCA could be upgraded primarily as a consequence of a
further reduction in the stock of problematic assets, which
translates into a material decline in the problematic asset
ratio, combined with a funding profile which is less reliant on
market funding. A sustained improvement in recurrent
profitability and/or stronger capital and leverage ratios could
also trigger an upgrade of the BCA.

As the bank's deposit ratings are linked to the BCA, a positive
change in the bank's BCA would be likely to benefit the deposit
ratings. The deposit ratings could also be upgraded upon changes
to the bank's current liability structure, indicating a lower
loss given failure to be faced by deposits.

WHAT COULD CHANGE THE RATING - DOWN

Abanca's ratings could be downgraded as a result of (1) a
reversal in the current asset-risk trends, translating into an
increase in the volume of problematic assets, or (2) a weakening
in the bank's risk-absorption capacity as a result of subdued
profitability levels.

Abanca's deposit ratings could also be affected by changes in the
liability structure that indicate a higher loss given failure to
be faced by deposits.

LIST OF AFFECTED RATINGS

Issuer: ABANCA Corporacion Bancaria, S.A.

Upgrades:

Adjusted Baseline Credit Assessment, upgraded to ba2 from ba3

Baseline Credit Assessment, upgraded to ba2 from ba3

Long-term Counterparty Risk Assessment, upgraded to Baa3(cr) from
Ba1(cr)

Short-term Counterparty Risk Assessment, upgraded to P-3(cr) from
NP(cr)

Long-term Bank Deposits, upgraded to Ba2 Positive from Ba3 Stable

Outlook Action:

Outlook changed to Positive from Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks
published in April 2018.


CAIXABANK CONSUMO 4: Moody's Rates EUR136MM Series B Notes (P)B1
----------------------------------------------------------------
Moody's Investors Service has assigned the following provisional
ratings to Notes to be issued by CAIXABANK CONSUMO 4, FONDO DE
TITULIZACION:

EUR1,564 million Series A Fixed Rate Asset Backed Notes due July
2056, Assigned (P)Aa3 (sf)

EUR136 million Series B Fixed Rate Asset Backed Notes due July
2056, Assigned (P)B1 (sf)

RATINGS RATIONALE

The transaction is a static cash securitisation of unsecured
consumer loans extended to obligors in Spain by CaixaBank, S.A.
(CaixaBank) (Baa1(cr)/P-2(cr), Baa1 LT Bank Deposits).

The provisional portfolio of underlying assets consists of
unsecured loans originated in Spain for a total balance of c. EUR
1,84bn, from which a final pool will be selected, based on
certain eligibility criteria, funded by the issued Notes equal to
an amount of EUR 1,70bn.

As of April 25, 2018, the provisional pool cut contains 272,205
contracts with a weighted average seasoning of 0.71 years. The
portfolio consists of unsecured consumer loans. These pools are
composed of unsecured consumer loans, used for several purposes,
such as property improvement, car acquisition or repair and other
undefined or general purposes. 42% of the portfolio correspond to
pre-approved unsecured loans. Pre-approved loans require the
borrower to be a CaixaBank active customer for at least 6 months
and a minimum behavioral scoring. 7.12% of the provisional pool
correspond to bullet loans.

According to Moody's, the transaction benefits from credit
strengths such as the granularity of the portfolio, the high
excess spread and the financial strength and securitisation
experience of the originator. However, Moody's notes that the
transaction features some credit weaknesses such as the
amortisation of the reserve fund lacking performance triggers and
a floor in terms of the initial Notes balance, and the high
degree of linkage to CaixaBank. Commingling risk is partly
mitigated by the transfer of collections to the issuer account on
a daily basis.

Moody's analysis focused, amongst other factors, on (i) an
evaluation of the underlying portfolio of loans and the
eligibility criteria; (ii) historical performance information of
the total book and past ABS transactions; (iii) the credit
enhancement provided by subordination and the reserve fund; (iv)
the static nature of the portfolio; (v) the liquidity support
available in the transaction by way of principal to pay interest
and the reserve fund; and (vi) the overall legal and structural
integrity of the transaction.

MAIN MODEL ASSUMPTIONS

Moody's determined a portfolio lifetime expected mean default
rate of 6.5%, expected recoveries of 15% and Aa2 portfolio credit
enhancement ("PCE") of 18.5%. The expected defaults and
recoveries capture Moody's expectations of performance
considering the current economic outlook, while the PCE captures
the loss Moody's expects the portfolio to suffer in the event of
a severe recession scenario. Expected defaults and PCE are
parameters used by Moody's to calibrate its lognormal portfolio
loss distribution curve and to associate a probability with each
potential future loss scenario in its ABSROM cash flow model to
rate consumer ABS transactions.

METHODOLOGY

The principal methodology used in these ratings was "Moody's
Approach to Rating Consumer Loan-Backed ABS" published in
September 2015.

The ratings address the expected loss posed to investors by the
legal final maturity of the Notes. In Moody's opinion, the
structure allows for timely payment of interest and ultimate
payment of principal by the legal final maturity of the Class A
Notes only. Moody's ratings address only the credit risks
associated with the transaction. Other non-credit risks have not
been addressed but may have a significant effect on yield to
investors.

FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE
RATINGS:

Factors that may cause an upgrade of the ratings include a
significantly better than expected performance of the pool
together with an increase in credit enhancement of the Notes.
Factors that may cause a downgrade of the ratings include a
decline in the overall performance of the pool and a significant
deterioration of the credit profile of the originator CaixaBank,
S.A.

LOSS AND CASH FLOW ANALYSIS:

Moody's used its cash flow model ABSROM as part of its
quantitative analysis of the transaction. ABSROM enables users to
model various features of a standard European ABS transaction -
including the specifics of the loss distribution of the assets,
their portfolio amortisation profile, yield as well as the
specific priority of payments, swaps and reserve funds on the
liability side of the ABS structure. The model is used to
represent the cash flows and determine the loss for each tranche.
The cash flow model evaluates all loss scenarios that are then
weighted considering the probabilities of the lognormal
distribution assumed for the portfolio loss rate. In each loss
scenario, the corresponding loss for each class of Notes is
calculated given the incoming cash flows from the assets and the
outgoing payments to third parties and Noteholders. Therefore,
the expected loss or EL for each tranche is the sum product of
(i) the probability of occurrence of each loss scenario; and (ii)
the loss derived from the cash flow model in each loss scenario
for each tranche.

STRESS SCENARIOS:

In rating consumer loan ABS, the mean default rate and the
recovery rate are two key inputs that determine the transaction
cash flows in the cash flow model. Parameter sensitivities for
this transaction have been calculated in the following manner:
Moody's tested 9 scenarios derived from the combination of mean
default: 6.5% (base case), 6.85% (base case *1.05), 7.25% (base
case *1.15) and recovery rate: 15% (base case), 10% (base case -
5%), 5% (base case - 10%). The 6.5%/15% scenario would represent
the base case assumptions used in the initial rating process. At
the time the rating was assigned, the model output indicated that
Class A would have achieved Baa1 even if the mean default was as
high as 9% with a recovery as low as 10% (all other factors
unchanged). Class B would have achieved Caa3 in the same
scenario.


CATALONIA: S&P Affirms 'B+/B' ICRs, Outlook Negative
----------------------------------------------------
On May 25, 2018, S&P Global Ratings affirmed its 'B+' long-term
and 'B' short-term issuer credit ratings on the Autonomous
Community of Catalonia. The outlook is negative. S&P removed
these ratings from CreditWatch with negative implications, where
it placed them on Oct. 4, 2017.

OUTLOOK

The negative outlook reflects the possible adverse impact on
Catalonia's ability to fully and timely service its debt because
of ongoing political tension between Catalonia's government and
Spain's central government.

Downside Scenario

S&P said, "We could lower our ratings on Catalonia over the next
year if we observed a fresh escalation of political tensions
between Catalonia's government and the central government that,
in our view, could hamper the full and timely refinancing of
Catalonia's short-term debt instruments or undermine the
effectiveness of the central government's financial support to
Catalonia."

Upside Scenario

S&P said, "We could revise the outlook to stable over the next
year if we saw clear evidence of easing political tensions, and
we concluded that there was no increased risk to the coordination
between the two governments beyond what we currently expect."

RATIONALE

On May 14, 2018, the Catalan parliament elected Mr. Joaquim Torra
as the new president of the Catalan government. Mr. Torra
strongly supports independence, in our view, and appears to be a
close collaborator of the former president, Mr. Carles
Puigdemont. On May 19, 2018, Mr. Torra appointed a cabinet that
includes Catalan politicians currently outside of the country or
in jail, and we understand that this could impede the formation
of a new government. S&P said, "We also understand that, as a
consequence, the Spanish government could prolong the direct
control of the Catalan government through the application of
article 155 of the Spanish Constitution. In addition, we
understand the central government has indicated that, if it
perceives that Catalonia's government (once formed) is acting
illegally, it would consider seeking approval from Spain's senate
for a new application of article 155."

S&P said, "We think Spain's main opposition parties (socialist
PSOE and centrist Ciudadanos) may support the central government
in this regard. We therefore believe there is still a potential
for the confrontation to intensify. The uncertainty that
continues to affect Catalan politics could hamper the essential
coordination between the two governments on which Catalonia
depends for making its scheduled debt service payments. However,
we don't think this potential for increased confrontation will be
resolved in the immediate or short term, but rather drag on in
the medium to long term."

There's a lower likelihood of an immediate disruption of debt
service, but there's still no clear visibility on a de-escalation
of the political conflict After the elections held on Dec. 21,
2017, it took several months for pro-independence parties to
agree on a candidate that could be elected by the Catalan
parliament, following several attempts to elect other candidates
that failed due to diverse legal impediments. Mr. Torra, the new
president, has indicated that he intends to continue working
toward the establishment of a republic in Catalonia. Mr. Torra
has appointed a new cabinet, including regional ministers that
the central government considers ineligible due to their legal
status.

S&P said, "We understand this is currently blocking the effective
formation of a new government in Catalonia. We therefore believe
the Spanish central government remains in control of Catalonia's
administrative units, which, in our opinion, have continued to
function smoothly over the past few months of direct Spanish
government control. We currently have no visibility about how
this impasse may be resolved, or the timing thereof.

"Since political tensions escalated in October 2017, the central
government has provided Catalonia with liquidity, and we expect
it will continue this support after the inauguration of the new
president.

"We continue to view the possibility of renewed political
tensions after the election as a major hurdle for what we view as
the necessary cooperation between the two governments for
Catalonia to continue to make its scheduled debt service
payments. In our view, financial management is a key weakness in
Catalonia's credit profile and one that constrains the ratings.
However, we currently don't expect any immediate disruptions to
the central government's liquidity support. Both the president of
the central government, Mr. Mariano Rajoy, and Catalonia's
president, Mr. Torra, have expressed willingness to engage in
dialogue, although the timing or content of any talks remains
uncertain.

"In our ratings, we take into account Catalonia's relatively high
wealth levels in an international context. We note, however that
the political instability has had a still-relatively-limited
effect on the regional economy. Catalonia's economy grew during
2017 in line with Spain's economy (of which it represents about
19%). Although over 4,000 companies have moved their legal
domicile from Catalonia since the region's declaration of
independence, their decision does not appear to have translated
into weaker economic activity. We cannot rule out that protracted
instability may yet affect the Catalan economy. In our view, the
extent of the economic impact on Catalonia will largely depend on
the duration of the political tension between the two
governments.

"The institutional framework for Spanish normal status regions
has weaknesses, in our opinion, particularly regarding its
ability to ensure an adequate match between revenues and
expenditures, notably in the low points of the economic cycle as
highlighted during the economic crisis that started in 2008.
Moreover, we don't think equalization patterns are transparent or
adequately justified. However, we take into account that the
central government has provided considerable financial support to
the regional tier, which has mitigated the consequences of their
budgetary imbalances. Economic growth in Spain has led to an
increase in regional revenues (including those of Catalonia),
even in the absence of a financing reform, which has been
repeatedly delayed."

Budgetary outcomes remain uncertain, but continued fiscal
consolidation and stabilization of debt are likely

S&P said, "We have positively reassessed Catalonia's budgetary
performance on the back of a positive trend in budgetary
outcomes, which we project may continue, absent any unexpected
changes to the economic environment.

"Catalonia's budgetary performance in 2017 was better than we had
estimated, with an operating deficit of about 1.5% of operating
revenues, compared with our previous projection of 2.5% of
operating revenues. Similarly, Catalonia posted a deficit after
capital accounts of about 7.3% of total revenues, compared with
our previous assumption of a deficit of 7.7% of total revenues.

"However, our forecasts are subject to the uncertainty stemming
from the current political climate. As previously noted, we lack
sufficient visibility about the possible impact of the current
political conditions in Catalonia on its 2018 budgetary
performance. As of today, there is no budget for 2018.

Furthermore, we cannot predict the new Catalan government's
fiscal stance. In our base-case scenario, we believe that
Catalonia will continue its process of fiscal consolidation,
driven by increased revenues from the regional financing system,
on the back of recovery of the national economy. We assume
budgetary consolidation will continue over our forecast scenario
to year-end 2020. We expect Catalonia should continue to post
negative operating balances, but could come close to balancing by
year-end 2020, while deficits after capital accounts gradually
drift down to about 6% of total revenues by 2020.

"We do not anticipate that Catalonia will use its budgetary
flexibility to improve its budgetary outcomes more than our base-
case projections. Following years of cost-cutting, and in an
environment of rising revenues, we think further cost cuts are
unlikely. At the same time, taxes in Catalonia are already high
compared with other Spanish regions, limiting the potential to
increase tax collection.

"As per our base-case scenario, we expect Catalonia's debt will
gradually decrease in relative terms--albeit remaining very high-
-due to narrowing deficits and increasing revenues. We expect
Catalonia's tax-supported debt will reach about 284% of
consolidated operating revenues by year-end 2020, down from a
325% peak in 2015. This level of indebtedness remains very high
in an international context, and surpasses our highest debt
benchmark. We believe Catalonia has moderate contingent
liabilities, arising mostly from ongoing and potential
litigation."

Timely central government transfers to cover debt service and
deficits, along with settlements from the regional financing
system, helped Catalonia slightly improve its liquidity position
in 2017, with lower periods of payment to suppliers and higher
cash reserves. Nevertheless, Catalonia's debt service remains
high, and S&P therefore considers that the region will continue
to rely heavily on central government support to maintain its
current liquidity position.

The central government covers Catalonia's long-term debt service
through the "Fondo de Liquidez Auton¢mico" liquidity facility.
However, Catalonia must seek market funding for its short-term
debt maturities, and requires central government authorization to
do so.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable. At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed
decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity
to articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.

  RATINGS LIST

                                     Rating
                                     To             From
  Catalonia (Autonomous Community of)
   Issuer Credit Rating
  Foreign and Local Currency         B+/Negative/B B+/Watch Neg/B
  Senior Unsecured
  Foreign and Local Currency         B+             B+/Watch Neg
  Foreign and Local Currency         B              B/Watch Neg
  Commercial Paper
  Local Currency                     B              B/Watch Neg


FT HIPOTECARIA UCI 12: S&P Raises Rating on Class B Notes to 'BB'
-----------------------------------------------------------------
S&P Global Ratings raised to 'BB (sf)' from 'B+ (sf)' and removed
from CreditWatch with positive implications its credit rating on
Fondo de Titulizacion Hipotecaria UCI 12's class B notes. At the
same time, S&P affirmed and removed from CreditWatch positive its
'A+ (sf)' rating on the class A notes and its 'B- (sf)' rating on
the class C notes.

S&P said, "The rating actions follow the application of our
relevant criteria and our full analysis of the most recent
transaction information that we have received, and reflect the
transaction's current structural features. We have also
considered our updated outlook assumptions for the Spanish
residential mortgage market.

"Our structured finance ratings above the sovereign (RAS)
criteria classify the sensitivity of this transaction as
moderate. Therefore, after our March 23, 2018 upgrade of Spain to
'A-' from 'BBB+', the highest rating that we can assign to the
senior-most tranche in this transaction is six notches above the
Spanish sovereign rating, or 'AAA (sf)', if certain conditions
are met. For all the other tranches, the highest rating that we
can assign is four notches above the sovereign rating.

The only counterparty risk in this transaction is related to the
guaranteed investment contract (GIC) account. It was being
provided by Santander UK PLC (A/Stable/A-1) until April 2018
when, following Banco Santander S.A.'s upgrade and consequently
becoming eligible as per the transaction documents, the GIC
account was moved back to Banco Santander S.A., the original GIC
provider at closing. The replacement language in this
transaction's GIC account agreements is in line with S&P's
current counterparty criteria. Therefore, S&P's current
counterparty criteria do not cap our ratings on these
transactions.

S&P said, "Our European residential loans criteria, as applicable
to Spanish residential loans, establish how our loan-level
analysis incorporates our current opinion of the local market
outlook. Our current outlook for the Spanish housing and mortgage
markets, as well as for the overall economy in Spain, is benign.
Therefore, we revised our expected level of losses for an
archetypal Spanish residential pool at the 'B' rating level to
0.9% from 1.6%, in line with table 87 of our European residential
loans criteria, by lowering our foreclosure frequency assumption
to 2.00% from 3.33% for the archetypal pool at the 'B' rating
level.

"After applying our European residential loans criteria to this
transaction, the following are foreclosure frequency and loss
severity assumptions resulting."

  Rating level     WAFF (%)     WALS (%)
  AAA                 30.42       15.31
  AA                  24.08       11.19
  A                   19.22        5.77
  BBB                 15.06        3.60
  BB                  11.77        2.44
  B                    9.00        2.00

WAFF--Weighted average foreclosure frequency. WALS--Weighted
average loss severity.

UCI 12 class A, B, and C notes' credit enhancement has increased
to 17.9%, 14.3%, and 4.6%, respectively, from 16.9%, 13.4%, and
4.0% due to the amortization of the notes, which is sequential
because the level of loans in arrears for more than 90 days
exceeds 2% of the outstanding balance of the assets.

S&P said, "Following the application of our criteria, we have
determined that our assigned ratings on the classes of notes in
this transaction should be the lower of (i) the rating as capped
by our RAS criteria, (ii) the rating as capped by our
counterparty criteria, or (iii) the rating that the class of
notes can attain under our European residential loans criteria.

"The application of our European residential loans criteria,
including our updated credit figures and our cash flow analysis,
indicates that our rating on the class A notes could withstand
our stresses at a higher rating level than that currently
assigned. However, our rating is constrained by the sensitivity
of this class of notes to the level of potential incoming
recoveries. The application of our RAS criteria does not cap our
rating on this. We have therefore removed from CreditWatch
positive and affirmed our 'A+ (sf)' rating on the class A notes.

"Our rating on the class B notes is not capped by our RAS
analysis as the application of our European residential loans
criteria, including our updated credit figures, determine our
rating on the notes at 'BB (sf)'. We have therefore removed from
CreditWatch positive and raised to 'BB (sf)' from 'B+ (sf)' our
rating on the class B notes.

"Credit enhancement has increased for the class C notes because
of the reserve fund not being able to amortize. However,
following the application of our criteria for assigning 'CCC'
category ratings, we believe that payments on this class of notes
are not depend upon favorable financial and economic conditions.
We have therefore affirmed and removed from CreditWatch positive
our 'B- (sf)' rating on the class C notes."

UCI 12 is a Spanish RMBS transaction that closed in June 2005 and
securitizes a portfolio of residential mortgage loans, which
Union de Creditos Inmobiliarios, Establecimiento Financiero de
Credito originated and services.

  RATINGS LIST
  Class             Rating
              To               From

  Fondo de Titulizacion Hipotecaria UCI 12
  EUR900 Million Mortgage-Backed Floating-Rate Notes

  Rating Raised And Removed From CreditWatch Positive

  B           BB (sf)         B+ (sf)/Watch Pos

  Ratings Affirmed And Removed From CreditWatch Positive
  A           A+ (sf)         A+ (sf)/Watch Pos
  C           B- (sf)         B- (sf)/Watch Pos


JOYE MEDIA: Moody's Assigns B1 CFR on Revised Capital Structure
---------------------------------------------------------------
Moody's Investors Service has assigned a B1 Corporate Family
Rating ("CFR") and a B1-PD Probability of Default Rating ("PDR")
to Joye Media S.L. ("Joye"), the parent entity above the
restricted group that owns Imagina Media Audiovisual, S.L.
("Imagina"), a leading global integrated international sports,
media and entertainment group.

Concurrently, the agency has assigned (1) Ba3 ratings to the
EUR300 million senior secured term loan (TLA - due in 2024),
EUR380 million amortizing senior secured term loan (TLB -- due in
2025) and the EUR60 million senior secured revolving credit
facility (RCF - due in 2024) being issued by Invictus Media
S.L.U. ("Invictus") and Imagina, and (2) a B3 rating to the
EUR180 million senior secured second lien facility being issued
by Invictus and Imagina (due in 2025). The outlook on all ratings
is stable.

Imagina is revising the capital structure that it had proposed in
March 2018. The new structure will consist of the above rated
debt instruments. Moody's is concurrently withdrawing the B1 CFR
and B1-PD PDR assigned originally to Invictus as the consolidated
accounts for the group will now be produced at Joye level. The B1
CFR at Joye level reflects, among other things, Moody's
expectation that there will not be material differences between
the financial statements of Joye and Calidora Investments S.L.
("Calidora"), the top entity within the Imagina restricted group,
and that there will be an ongoing obligation to provide
reconciliation between the financial statements of Joye and those
of Calidora.

The agency is also withdrawing the ratings assigned to the
previously proposed capital structure consisting of EUR660
million of Term Loan B, EUR200 million of Term Loan A and EUR60
million RCF.

"The assignment of the B1 CFR at Joye reflects the fact that the
forecasted group leverage remains unchanged despite the proposed
revisions in its contemplated capital structure. The CFR
continues to reflect the group's moderate Moody's adjusted gross
leverage of around 4.4x for FY2017 on a pro-forma basis and the
high reliance of its EBITDA generation from the international
agency contract with La Liga which currently runs until
2020/2021," says Gunjan Dixit, a Moody's Vice President -- Senior
Credit Officer, and lead analyst for Imagina.

"The rating reflects the risk of future sports rights inflation
and the uncertainties associated with the contract renewals but
is nevertheless supported by the group's strong relationship with
La Liga (particularly in relation to the international agency
contract) and also other industry players, its integrated
business model with exposure to content production and
audiovisual services, and expected healthy cash flow generation,"
adds Ms. Dixit.

RATINGS RATIONALE

  - RATIONALE FOR DEBT INSTRUMENT RATINGS AND B1-PD PDR

The EUR300 million TLA and the EUR380 million TLB are ranked
highest in priority of claims pari-passu with the EUR60 million
RCF and are rated Ba3. The loans are secured against share
pledges and benefit from guarantees from subsidiaries accounting
for 80% of group EBITDA. The lowest ranking debt instrument in
the waterfall is the EUR180 million second lien term loan (rated
B3) which provides cushion to the Ba3 rated debt in the capital
structure.

The PDR of B1-PD reflects the expected recovery rate of 50%
typically assumed by Moody's for a capital structure that
consists of secured first lien and second lien bank facilities
with financial covenants.

- RATIONALE FOR B1 CFR

Joye's B1 CFR reflects its (1) global scale of operations with
good international presence and diversity of its operations; (2)
well established relationship with La Liga, Spain's football
league, and other key industry players; (3) strong quality of its
current sports rights properties; (4) the agency model for the
international La Liga rights, which provides a stable and
predictable stream of revenues; (5) high visibility on revenue
and EBITDA growth for 2018/19 owing to the large proportion of
contracted revenues; (6) ability to de-lever with EBITDA growth,
mandatory amortisation of the TLA and a cash sweep mechanism in
the absence of material M&A or shareholder returns, and (7) the
value of the company's stake in A3M, which could be monetised if
needed.

However, the rating is constrained by (1) the high sports rights
contract concentration risk, as the largest international agency
contract with La Liga represents a high proportion of the group
EBITDA; (2) the potential increase in competition in sports
rights bidding process and/ or significant cost inflation for
football rights in general; (3) risks related to future contract
losses due to budget constraints and/ or low margin or loss-
making future contracts could negatively affect the credit
profile of the business; (4) Moody's adjusted gross leverage of
4.4x at the end of 2017 on a pro-forma basis; and (5) a lack of
past track record for sustained and visible EBITDA growth and
positive free cash flow generation before 2016, with poor EBITDA
margins before 2015.

After the re-capitalization transaction, Imagina's gross Moody's
adjusted leverage would be moderate at around 4.4x at the end of
2017. Moody's expects the company to continue to de-lever going
forward in the absence of meaningful M&A and/ or shareholder
returns. Imagina is expected to remain free cash flow generative
given its limited capex requirements. However, the credit metrics
of the company could be negatively impacted if it was to lose any
key sports rights in the auction process or win at a substantial
price inflation which it may not be able to pass on to the
broadcasters in full. In this regard, Moody's cautiously
recognizes that the La Liga domestic rights will be auctioned in
2019 and the company could face increased competition from the
OTT players. In addition, Imagina will need to renew the
international agency contract with La Liga by 2020/21.

On February 5, the Italian league announced that the domestic
television rights for Serie A games for the period 2018 to 2021
have been sold to Imagina's Mediapro for EUR1.05 billion a year.
The court of Milan has challenged the tender that Mediapro had
launched in the Italian market in order to sell the rights to the
different broadcasters. Moody's has for now not included it as
part of its analysis for Imagina's rating assessment. The agency
recognizes that the debt documentation of Imagina aims to build
sufficient ring-fencing against any initial potential losses or
debt associated with the Italian business. Nevertheless, if the
Italian business turns to be meaningfully loss making and impacts
group's consolidated credit metrics negatively for a sustained
period, it could have negative rating consequences.

At transaction closing, Imagina will have cash on balance sheet
of around EUR78 million (excluding the EUR214 million of cash
dedicated towards the BeIN Sports payable). The company will also
have access to EUR60 million of revolving credit facility due
2024. Moody's expects the company's cash flow from operations to
remain healthy in 2018 and 2019, which, together with the RCF,
should be sufficient to meet the company's liquidity requirements
over the next 12 to 18 months. The facilities are restricted by
leverage based financial covenants to be tested quarterly. The
company will be amortising TLA and will not have any material
scheduled refinancing needs until 2025, when the TLB falls due.

RATIONALE FOR STABLE OUTLOOK

The stable outlook on the rating reflects Moody's expectation
that Imagina will be able to grow its revenues and EBITDA
steadily by successfully winning and monetizing content,
especially the sports rights contracts. The outlook assumes that
Imagina will successfully renew its key contracts at economic
terms.

WHAT COULD CHANGE THE RATING UP/DOWN

A rating upgrade would be dependent on qualitative considerations
such as a longer track record of operation under the new football
model, a decrease in contract concentration levels, visibility on
the renewal of the key contracts, a reduction in the complexity
of the group structure associated with potential new Italian
business, and track record of adherence to the financial policies
that will be implemented by OHC, its new majority shareholder.

Upward rating pressure could be exerted over time if (1) the
company's operating performance continues to remain strong
supported in particular by a continued healthy and profitable
sports rights contracts portfolio; (2) its Moody's adjusted Gross
Debt/ EBITDA falls sustainably well below 3.5x; and (3) there is
continued visible improvement in company's free cash flow
generation (after dividends and capex -- as defined by Moody's).

Downward ratings pressure could be exerted if (1) the company
fails to renew its key contracts at economic terms; (2) the
company materially under-performs against its business plan
(including any potential new business in Italy); (3) its Moody's
adjusted Gross Debt/ EBITDA sustainably rises above 4.5x due to
M&A and/ or material shareholder returns; and (4) its free cash
flow generation deteriorates materially on a sustained basis.

LIST OF AFFECTED RATINGS

Issuer: Joye Media S.L.

Assignments:

Corporate Family Rating, Assigned B1

Probability of Default Rating, Assigned B1-PD

Outlook Actions:

Outlook, Assigned Stable

Issuer: Imagina Media Audiovisual, S.L.

Assignments:

BACKED Senior Secured Bank Credit Facility, Assigned Ba3

Withdrawals:

BACKED Senior Secured Bank Credit Facility, Withdrawn ,
previously rated B1

Outlook Actions:

Outlook, Remains Stable

Issuer: Invictus Media S.L.U.

Assignments:

BACKED Senior Secured Second Lien Bank Credit Facility, Assigned
B3

BACKED Senior Secured First Lien Bank Credit Facility, Assigned
Ba3

Withdrawals:

BACKED Senior Secured Bank Credit Facility, Withdrawn, previously
rated B1

Corporate Family Rating, Withdrawn, previously rated B1

Probability of Default Rating, Withdrawn, previously rated B1-PD

Outlook Actions:

Outlook, Remains Stable

The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.

COMPANY PROFILE

Headquartered in Spain, Joye is the parent entity above the
restricted group for Imagina. For FY2017, Imagina reported
revenue of EUR1649 million and EBITDA of EUR189 million in its
audited results.


OBRASCON HUARTE: Moody's Confirms B3 CFR, Outlook Stable
--------------------------------------------------------
Moody's Investors Service has confirmed the B3 corporate family
rating (CFR) and the B3-PD probability of default rating (PDR) of
Spanish construction company Obrascon Huarte Lain S.A. ("OHL" or
"group"). Concurrently, Moody's confirmed the B3 instrument
ratings on the group's senior unsecured notes due 2020, 2022 and
2023. The outlook is stable.

The rating action follows the group's successful completion of
the sale of OHL Concesiones S.A.U. (OHL Concesiones) to IFM
Global Infrastructure Fund (IFM), guidance on its future business
strategy and redemption of almost all bank debt and a portion of
its senior unsecured notes due 2020, 2022 and 2023. The rating
action concludes Moody's review for possible upgrade initiated on
December 1, 2017.

RATINGS RATIONALE

The B3 rating with a stable outlook reflects the material
improvement in OHL's liquidity profile following the receipt of
almost EUR2 billion of net cash proceeds for the sale of its
stake in OHL Concesiones to IFM, which closed on April 12, 2018.
It further recognizes the group's significantly reduced
indebtedness following a EUR702 million repayment of almost all
bank debt from disposal proceeds as well a portion of its
outstanding unsecured notes. Upon expiration of a tender process
related to a put event triggered by the completed IFM deal on May
12, 2018, EUR228 million of notes (due 2020, 2022 and 2023) in
aggregate have been tendered. This will leave around EUR679
million of total debt outstanding at the group's recourse level
and EUR59 million of non-recourse debt, compared with total gross
indebtedness of about EUR1.7 billion as of March 31, 2018. Pro
forma for the transaction, and assuming no excessive
extraordinary dividend payment to shareholders, OHL's cash
position increases to about EUR1.5 billion as of 31 March 2018.
With this, the rating agency recognizes OHL's substantially
enhanced liquidity situation, which it now regards as solid and
which strongly supports the assigned rating.

Nevertheless, the B3 rating also factors in Moody's view that
OHL's weak profitability and loss making legacy contracts
combined with restructuring actions will continue to consume cash
in the near term and that OHL will only slowly improve
profitability over the next two to three years. For instance,
Moody's-adjusted EBITDA will remain negative in 2018 (EUR98
million negative reported EBITDA in the 12 months ended March
2018, including large one-off charges for a penalty and related
costs during Q1-18) due to expected sizeable restructuring costs
associated with legacy projects, redundancy measures and the
ongoing rightsizing of the group's loss-making industrial
division. As a result, and despite potential further debt
reductions in the short to medium term, OHL's Moody's-adjusted
gross leverage will likely stay above 6x debt/EBITDA over the
next two years. However, Moody's acknowledges measures
implemented by management to almost half the group's substantial
overhead costs with the aim to improve construction EBITDA
margins towards 5% by 2020 (2.1% in 2017, excluding redundancy
costs and legacy losses). Moody's still considers that the
visibility on future performance remains very limited.

The rating confirmation further reflects OHL's sustained weak
free cash flow generation, which has been negative in the past
couple of years and will only gradually improve as the cash drain
from legacy projects, industrial activities and restructuring
(EUR268 million in aggregate projected for 2018 and 2019) is
phasing out in 2020. While available excess cash post the
transaction, together with proceeds from planned asset disposals
in 2018 and 2019, will help cover these cash needs, Moody's
expects free cash flow generation in OHL's recourse business to
remain negative until 2020. However, should the group show its
ability to sustainably turn free cash flow positive, whilst
maintaining an adequate liquidity position, upward pressure on
the ratings would build.

LIQUIDITY

OHL's liquidity has materially strengthened post the transaction,
which Moody's now regards as overall solid. While a major portion
of net cash proceeds from the disposal of OHL Concesiones of
almost EUR2 billion were used for debt repayments, the group
still faces significant cash requirements over the next 12-18
months. For instance, taking into account estimated transaction
costs, committed equity investments for developments as well as
cash outflows for restructuring and legacy projects, Moody's
estimates OHL's available cash sources to shrink materially.
Combined with a EUR308 million cash position as of March 31,
2018, projected negative free cash flow generation, net of
expected cash proceeds from asset disposals in 2018 and 2019,
however, Moody's expects OHL's currently available cash sources
to sum to around EUR1 billion, which leaves a net cash position
and would allow for potential further debt repayments and gross
de-leveraging in the near future.

After the redemption of its bank debt, OHL has currently no
access to committed external liquidity, although Moody's expects
the group to put in place a committed credit line over the next
few months, which would provide additional financial flexibility,
such as for typically highly seasonal working capital swings.

RATING OUTLOOK

The stable outlook reflects the solid liquidity and the
expectation that OHL's profitability will gradually strengthen,
supporting positive Moody's-adjusted EBITDA and free cash flow
generation in the construction business over the next 18 months.
Moreover, the stable outlook assumes OHL's Moody's-adjusted
leverage to steadily decline towards 6x gross debt/EBITDA, driven
primarily by forecast earnings growth.

WHAT COULD CHANGE THE RATING DOWN / UP

OHL's ratings could be upgraded, if (1) OHL's profitability
improves sustainably with Moody's-adjusted EBITDA margins of at
least 5%, (2) Moody's-adjusted gross debt/EBITDA sustainably
trends to below 6x, (3) Moody's-adjusted EBITA/interest expense
exceeds 1.5x, and (4) liquidity remains adequate.

Downward pressure on the ratings would build, if (1) EBITDA
remains sustainably negative after 2018, (2) Moody's-adjusted
gross debt/EBITDA sustainably exceeds 7x, (3) Moody's-adjusted
EBITA/interest expense falls below 1x. Negative rating pressure
would also build, if the group's short-term liquidity
deteriorated unexpectedly.

The principal methodology used in these ratings was Construction
Industry published in March 2017.

Headquartered in Madrid, OHL is one of Spain's leading
construction groups. The group's activities comprise its core
engineering and construction business (including industrial and
services divisions) and concessions development in identified
core markets in Europe, North and Latin America. In the 12 months
ended 31 March 2018, OHL reported sales of around EUR3.2 billion
and EUR98 million negative EBITDA. The Villar Mir family, via its
investment vehicles Inmobiliaria Espacio and Grupo Villar Mir
(GVM), currently holds a 51.1% equity stake in OHL.


VALENCIA: S&P Alters Outlook to Positive & Affirms 'BB/B' ICRs
--------------------------------------------------------------
On May 25, 2018, S&P Global Ratings revised its outlook on the
Spanish Autonomous Community of Valencia (AC Valencia) to
positive from stable. At the same time, S&P affirmed its 'BB/B'
long- and short-term issuer credit ratings.

OUTLOOK

The positive outlook indicates that Spain's continuing economic
recovery may lead to a steady increase in AC Valencia's revenues
that would enable its financial management to further reduce its
budgetary deficit and materially deleverage.

An upgrade of AC Valencia over the next 12 months hinges on
structurally improved budgetary performance on the back of a
narrower deficit, with the overall deficit steadily reducing
toward less than 10% of revenues on a sustained basis. This could
happen if revenues increased above our projections, while the
region's management maintained tight control over expenditure
growth. Under this scenario, S&P would anticipate a pronounced
reduction of the region's debt burden.

S&P said, "We could also upgrade AC Valencia if the central
government wrote off a substantial portion of the loans it lent
to the region, so that the region's tax-supported debt dropped
materially below 270% of consolidated operating revenues. We
would not consider debt relief from the central government a
default given our view of AC Valencia's debt with the central
government as intergovernmental debt."

Downside Scenario

S&P could revise the outlook to stable if it believed that AC
Valencia's performance could not surpass its base-case estimates
over its forecast horizon.

RATIONALE

S&P said, "The outlook revision reflects that AC Valencia seems
to be on a more sustainable path of deficit reduction than we
previously envisaged. While we continue to forecast negative
operating balances and sizable deficits over our forecast horizon
to 2020, we now believe that AC Valencia's performance could
structurally improve over this period. This could stem from the
region receiving higher revenues than we currently anticipate,
while maintaining a firm grip on expenditures. In addition, we
think that Spain's healthy economic growth will continue to
broaden fiscal bases, facilitating better budgetary results.

"At the same time, we assume the region will continue benefitting
from the central government's liquidity facilities to cover its
funding needs. Currently, AC Valencia's very high debt, although
diminishing, constrains the rating on the region.

"AC Valencia reduced its operating deficit to 5.4% of operating
revenues in 2017 from 12.1% a year before. At the end of last
year, the region's deficit after capital accounts was 13.6% of
total revenues -- still high but more favorable than our previous
projection of 15.7% and markedly lower than the 16.6% reported in
2016. This improvement was partly on the back of the strong
increase in operating revenues (10.6% in 2017), while the
region's operating expenditure growth remained manageable. This
is especially important given the existing rigidity of the
region's expenditure composition, which limits its spending
flexibility. In our opinion, Spain's strong nominal GDP growth
teamed with reasonable spending discipline should enable AC
Valencia to reduce the gap between operating revenues and
operating expenditures and gradually reduce its deficit after
capital accounts to 10% of total revenues by 2020."

A supportive framework and ongoing economic recovery underpin
budgetary consolidation

S&P said, "We believe that the Spanish institutional framework
under which AC Valencia operates is generally supportive. Spain's
central government has provided financial support to the regional
tier via liquidity facilities that were first created in 2012.
These facilities have gradually evolved to meet practically all
of the funding needs of those regions that adhere to them,
including AC Valencia, on very favorable terms. From 2012 to
March 2018, the region received about EUR44.8 billion from these
liquidity facilities. Over 80% of AC Valencia's debt at year-end
2017 consists of the central government's liquidity facilities.

"However, we think that the regional financing system still
suffers from weaknesses. In our view, the main drawback is the
difficulty in matching revenues and expenditures, especially in
the low points of the economic cycle.

"Reform of the system is overdue, in our view. Technical works
have started, but we do not have any visibility about the timing
or shape of an eventual reform, which continues to be postponed
because of political instability. Overall, we continue to deem
this reform as crucial to ensuring the long-term sustainability
of Spanish regional finances, and particularly important for the
regions that have suffered comparatively low levels of funding,
as has been the case in AC Valencia."

As Spain's economic recovery has gained momentum, and despite the
absence of a new financing system, regions have seen greater
revenues. This strengthened budgetary performances across the
board in 2017, including in AC Valencia.

S&P said, "Given the strong equalization component of Spain's
public finance system for normal-status regions, we take national
GDP per capita figures into consideration when evaluating the
economy of normal-status regions. We expect economic growth will
translate into higher revenues, underpinning the region's
budgetary consolidation and convergence toward the official
deficit targets set by the central government. However, we also
factor in that the region's socioeconomic profile is less
favorable than that of other Spanish regions. AC Valencia's GDP
per capita is 88% of the Spanish average, based on 2017 data from
the national statistics office. The region's unemployment rate,
at 16.8% of the active population as of Dec. 31, 2017, is high,
although diminishing, and similar to the 16.6% national average.
In addition, this level of unemployment is particularly high in
an international comparison. We believe that AC Valencia's
relatively weak socioeconomic profile is not adequately
compensated by Spain's equalization system.

"We note that AC Valencia's financial management has so far
failed to comply with the central government's fiscal targets.
The region's deficits may be attributed in part to below-average
equalization transfers between regions to AC Valencia under
Spain's public finance system, but also to large expenditures
that the region did not adjust swiftly enough when revenues fell
sharply when the financial crisis hit Spain in 2008. However, we
acknowledge that the region has markedly reduced its deficit in
national accounting terms, which includes the region's public
entities that consolidate under the European System of Accounts,
to 0.73% of the regional GDP in 2017 (against the 0.6% target)
from a deficit of 1.49% in 2016."

High deficits and very high debt burden are long-term constraints

The reviving national economy is set to help AC Valencia's
management improve slightly its budgetary performance from its
currently very weak position. But, we expect the region will
report deficits of above 10% of total revenues over 2018-2020. We
assume an annual increase in operating revenues of 5.1%, on
average, over 2018-2020, compared with our projections of Spain's
nominal GDP growth of 3.9%. We factor in that AC Valencia's
revenues from the regional financing system increased 10.9% in
2017 from 2016 levels.

AC Valencia has included in its 2018 budget, as it did in 2017,
about EUR1.3 billion of additional transfers from the central
government as a way to request the reform of the regional
financing system and offset the region's structural underfunding.
S&P said, "However, the central government has yet to grant these
amounts or overhaul the system, and we therefore do not include
them in our assessments. We note though that in 2017 AC Valencia
budgeted its own revenues in a conservative way such that its
actual own revenues partially compensated the central government
transfers budgeted in excess."

S&P said, "In our base case, we anticipate that AC Valencia's
operating expenditures will increase by 3.2% over 2018-2020--
which is less than operating revenues. Consequently, we expect AC
Valencia will reduce its operating deficit to close to 3.0% of
operating revenues by 2020 from 5.4% in 2017. At the same time,
we expect the deficit after capital accounts to reach 10.0% of
total revenues by 2020, compared with 13.6% in 2017. We believe
the region's net capital expenditures will average about EUR1
billion annually over 2018-2020, after bottoming out at EUR537
million in 2016. We consider that AC Valencia's weak financial
position stems largely from years of underfunding.

"In our view, AC Valencia's budgetary flexibility is weak given
the region's limited ability to cut expenditures. The region's
operating expenditures per capita are already among the lowest in
Spain. This largely explains the obstacles the region faces in
reducing its deficits.

"Despite a projected improvement in its budgetary performance, AC
Valencia's debt will likely remain very high. We estimate that
tax-supported debt will gradually decrease to a still-sizable
328% of consolidated operating revenues by 2020. We take into
account that the central government is refinancing the region's
long-term debt. This mitigates the risk arising from AC
Valencia's large stock of debt, in our opinion.

"We believe AC Valencia has low contingent liabilities. In our
view, the regional government's measures to streamline its public
sector and directly manage its debt curb the impact of the
region's public sector on its credit profile. We include all of
the debt of AC Valencia's satellite companies in our calculation
of tax-supported debt. Importantly, debt maturities of companies
under the European System of National and Regional Accounts
(ESA)-2010 scope are eligible for central government funding,
which we think limits the potential risk they may entail.

"In our view, AC Valencia has very low capacity to generate cash
internally because it still presents deficits after capital
accounts. We understand that the region has short-term facilities
for a nominal amount of about EUR1.9 billion. We calculate that
the average cash holdings and the unused portion of short-term
facilities cover less than 40% of AC Valencia's debt service for
the next 12 months, which we estimate at EUR5.9 billion. In our
view, this low debt service coverage ratio is mitigated by AC
Valencia's strong access to central government liquidity
mechanisms. Our expectation that central government liquidity
support will be sufficient and timely underpins our ratings on
Spanish normal-status regions, including AC Valencia."

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable. At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed
decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity
to articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.

  RATINGS LIST

                                      Rating
                                    To                  From
  Valencia (Autonomous Community of)
   Issuer Credit Rating
  Foreign and Local Currency          BB/Positive/B  BB/Stable/B
  Senior Unsecured
  Local Currency                      BB                BB
  Short-Term Debt
  Local Currency                      B                 B
  Commercial Paper
  Foreign and Local Currency          B                 B


=====================
S W I T Z E R L A N D
=====================


VAT GROUP: S&P Raises Issuer Credit Rating to 'BB', Outlook Pos.
----------------------------------------------------------------
S&P Global Ratings raised its long-term issuer credit rating on
Switzerland-based vacuum valve manufacturer VAT Group AG to 'BB'
from 'BB-'. The outlook is positive.

S&P said, "The upgrade reflects our expectation that the
company's financial performance will be stronger than we
previously anticipated thanks to increasing demand in its end
markets and the company's overall tight cost control, despite
recent one-off expenses tied to expanding its supply capacity and
an increase in staff costs."

As a result, in 2017, VAT Group delivered markedly stronger than
previously anticipated operating results. Year-on-year sale
growth was slightly above 36% at Swiss franc (CHF) 692 million
(approximately EUR590 million). S&P said, "We previously forecast
annual sales growth of 15%. Meanwhile, EBITDA margins remained
stable at about 31%, at around the same levels achieved in 2016;
we had expected a slight decrease."

S&P said, "These results, combined with the good operating
environment in the first quarter of 2018, caused us to review our
base case for 2018 and 2019. We now expect VAT's sustained growth
trajectory to continue, although more slowly than in 2017, when
results were exceptional. Our updated base case implies turnover
growth of about 10%-15%, with EBITDA margins stable at slightly
above 30%, one of the highest among the rated entities in the
capital goods sector.

"Our forecast recognizes the growth in VAT Group's end markets,
which has been boosted by further digitalization, process
automation, and the development of new semiconductor
architecture. The vacuum valve market reached $1.2 billion at
year-end 2017, an increase of about $200 million compared with
2016.

We also considered VAT Group's defensive business strategy. By
maintaining its technology hedge against other operators, it
intends to retain its dominant market share and also to increase
vacuum valve market penetration. VAT Group's overall market share
stood at more than 45% at year-end 2017.

"Nevertheless, our assessment of the company's business is
constrained by its narrow market and absence of meaningful
diversification. Almost 50% of VAT Group's turnover is generated
by its top three customers, a level of concentration we consider
to be relatively high. Compared to a wider panel of rated
entities in the capital goods market, such as Dometic Group or
KUKA AG, VAT Group's size in terms of revenues is limited.

"We anticipate that technology disruptions, digitalization across
various industries, and continuous growth in demand for organic
light-emitting diodes (OLED), not-AND (NAND) gates, and 3D NAND
(used in the latest flash memory technology) should translate
into solid revenue growth within the next 12-24 months.

"We now predict that VAT Group's funds from operations (FFO) to
debt for 2018-2019 will be well above 80%, while S&P Global
Ratings-adjusted debt to EBITDA will be slightly below 1.0x. Our
forecasts are supported by the company's stated financial policy
of maintaining net debt to EBITDA below 1.0x over time."

VAT Group is the global leading manufacturer of high-end vacuum
valves, multivalve modules, and edge-welded bellows, and the
group provides related value-added services. Its products are
used in a fairly wide range of industries that employ vacuum-
based manufacturing processes, but are predominantly used in
semiconductor, displays, solar, and other technology-related
industries.

S&P said, "The positive outlook reflects our expectation that the
company will improve its market share and operating margins
further, maintaining FFO to debt well above 60%; adjusted debt to
EBITDA well below 1.5x; and neutral DCF, as well as a positive
track record in financial policy and shareholders' distributions.
We could raise the rating on VAT Group by one notch to 'BB+' in
the coming 12 months or so, if the company maintains a positive
and consistent track record in its financial policy, while
keeping FFO to debt above 60% and neutral DCF. This implies that
it will prioritize the company's internal development needs over
shareholders' distribution while maintaining its net debt to
EBITDA below 1.0x.

"Given the robust order intake the company built over the course
of 2017, combined with solid prospects for growth in the vacuum
valve sector for the next 12-18 months, we consider ratings
downside to be limited.

"We could revise the outlook to stable if the company fails to
maintain its EBITDA margins at around 30%. This could occur if:
VAT Group loses its dominance of the market and one of its major
clients migrates to another supplier; or A breakthrough
innovation were to alter the demand for vacuum valves, resulting
in a declining market for the company."

Finally, if the company were unable to maintain FFO to debt well
above 60% and debt to EBITDA well below 1.5x, it would
immediately put the rating under pressure. This could
materialize, for example, if it pursued a more aggressive
dividend policy that caused DCF to be materially negative.


===========================
U N I T E D   K I N G D O M
===========================


AIR NEWCO: Moody's Rates New Sr. Sec. First Lien Facilities 'B3'
----------------------------------------------------------------
Moody's Investors Service has assigned B3 ratings to the new
senior secured first lien facilities of UK enterprise software
vendor Air Newco 5 S.A R.L. (Advanced), borrowed through its
subsidiary Air Newco LLC. Concurrently, the rating agency has
affirmed Air Newco 5 S.A R.L.'s B3 corporate family rating (CFR)
and B3-PD probability of default rating (PDR). The outlook is
stable.

The actions follow the syndication of new senior secured first
lien facilities, comprising a GBP282 million term loan B and a
$325 million term loan B, both due in 2024, as well as an
extended $50 million equivalent revolving credit facility (RCF)
maturing in 2023.

RATINGS RATIONALE

The B3 ratings on the GBP282 million senior secured first lien
term loan B, the $325 million senior secured first lien term loan
B and pari passu ranking $50 million equivalent RCF, in line with
the CFR, reflect the fact that they will be the only financial
instruments in the capital structure going forward.

Moody's estimates that Moody's adjusted gross debt/EBITDA for
Advanced remains high, at 7.3x (with the benefit of R&D
capitalisation) as of the end of February 2018 and pro forma for
the proposed refinancing. Nevertheless, the rating agency expects
an uplift in EBITDA in the fiscal year 2019 ending 28th February
2019, owing to the annualisation of cost savings initiatives, in
addition to organic revenue growth between 2% and 3% per annum in
the next few years. Moody's forecasts that adjusted leverage will
decrease towards 6.5x in the next 12 to 18 months but further
deleveraging will be more reliant on revenue growth.

The proposed refinancing will reduce Advanced's cost of borrowing
by replacing the expensive second lien tranche, which is paying
950 basis points over USD Libor, with first lien term debt. As a
result, the rating agency anticipates that free cash flow
generation (calculated by Moody's after interest paid), will
improve but is unlikely to exceed 5% of adjusted debt in the next
12 to 18 months.

The rating agency anticipates that future cash receipts from in-
the-money hedges on the existing debt instruments and GBP16
million cash overfunding from the refinancing will be used to
fund bolt-on acquisitions.

Advanced's B3 CFR continues to reflect the group's geographic
concentration in the UK, for which Moody's forecasts lower GDP
growth than in the Euro area and the group's short track record
of growing revenue organically under Vista ownership. However,
the CFR also incorporates Advanced's good market positions in its
niches, such as health and legal, with a high level of recurring
revenues representing approximately two thirds of total revenue
and increasing.

RATING OUTLOOK

The stable rating outlook reflects Moody's view that Advanced
will continue to deliver growth in EBITDA in the next 18 months,
driven by cost savings and organic revenue growth. As a result,
the rating agency expects that adjusted debt/EBITDA will
gradually decline and FCF/debt will modestly improve. The outlook
assumes no debt-funded acquisitions and no dividend payments as
well as ongoing good liquidity.

WHAT COULD CHANGE THE RATING -- UP/DOWN

Positive pressure could develop on Advanced's ratings if (1) the
group grew organically and achieved the planned cost savings,
leading to increased EBITDA and cash flows, and in particular (2)
adjusted debt/EBITDA fell towards 6.0x, (3) FCF/debt moved
towards the high single digits in percentage terms. The absence
of debt-funded shareholder returns or acquisitions would also be
required for an upgrade.

Conversely, Advanced's ratings could be downgraded if (1) the
group's operating performance deteriorated, leading to a decline
in EBITDA or negative FCF generation or (2) adjusted debt/EBITDA
increased to around 8.0x or (3) the liquidity profile weakened,
including through tight covenant headroom.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Software
Industry published in December 2015.

CORPORATE PROFILE

Headquartered in England, Advanced (whose ultimate parent is Air
Newco 5 S.A R.L.) employs approximately 2,000 staff in the UK, US
and India and has approximately 20,000 customers. The group
provides financial management systems (FMS) and selected
enterprise resource planning (ERP) software solutions to public
and private customers in the UK. In addition, it offers case
management solutions for legal practices, clinical patient
management systems for public and private health institutions and
student information systems for schools. Its Managed Services
division provides managed hosting services and cloud services. In
the fiscal year ended February 2018, Advanced reported revenues
of GBP227 million and EBITDA before exceptional items of GBP72
million.

Advanced is ultimately controlled by funds advised by Vista
Equity Partners following a take-private which closed in March
2015.


GAUCHO: Owner Mulls Sale as Part of Restructuring Plan
------------------------------------------------------
Hanna Sharpe at Business-Sale reports that the owner of the
Gaucho chain of steak restaurants is hoping to sell up as part of
a restructuring plan to save the wider business amid torrid
trading conditions in the casual dining sector.

Gaucho's board is looking for potential buyers that will be able
to put the firm on "sustainable financial footing" as one of many
options going forward, Business-Sale relays, citing Sky News.

The firm's board drafted in advisors at KPMG earlier this year to
look at the possibility of closing or selling 22 of the firm's
Cau restaurants, but has expanded the accountancy's remit to look
at proposals from potential buyers, Business-Sale recounts.

Reports also state that the firm may also resort to a company
voluntary arrangement in order to exit the Cau estate, Business-
Sale notes.

According to Business-Sale, in a statement, a Gaucho spokesman
said: "Having completed a strategic review and engaged with key
stakeholders, the directors have instructed advisers to commence
an options process.

"The process aims to secure a viable long-term structure for the
business. This may or may not lead to a sale."

With 16 restaurants around the UK, Gaucho is Britain's biggest
premium steak chain by number of outlets alone, Business-Sale
discloses.  All of these locations will continue to trade
throughout the review process, Business-Sale states.


HOUSE OF FRASER: Half of UK Stores Expected to Close Under CVA
--------------------------------------------------------------
Rachel Constantine at Business-Sale reports that House of Fraser
is expected to close up to half its UK stores as part of its
Company Voluntary Agreement (CVA), which will be implemented from
June.

House of Fraser plans on closing around 30 of its 59 stores
across the country as part of the CVA, which is a form of
business insolvency that is likely to result in much needed rent
cuts for the group on the remainder of the stores, Business-Sale
relays, citing the firm's reports.

Although House of Fraser currently refuses to comment, the news
come soon after Retail Sector announced the department store
chain is struggling to receive approval for the CVA from its
landlords, who have criticized plans for rent reductions,
Business-Sale notes.

In fact, sources have suggested that the CVA is yet to be put to
a vote amongst landlords, who could overturn the insolvency
decision if they feel another option such as the full or part
sale of the business would be more appropriate, Business-Sale
relates.

The British Property Federation (BPF) and Revo, which represents
landlords and retailers, have added to these concerns, suggesting
that members are increasingly likely to reject CVAs as they
become more commonplace on the high street, Business-Sale
discloses.


MARSTON'S ISSUER: Fitch Affirms Rating on Class B Notes at 'BB+'
----------------------------------------------------------------
Fitch Ratings has affirmed Marston's Issuer PLC's class A notes
and liquidity facility at 'BBB' and class B notes at 'BB+'. The
Outlooks are Stable.

KEY RATING DRIVERS

The quality of Marston's tenanted and franchise pubs has
continued to improve and the managed estate remained stable in
2017. The debt structure is robust and benefits from the standard
whole business securitisation (WBS) legal and structural features
and a comprehensive covenant package. Fitch's rating case free
cash flow debt service coverage ratios (FCF DSCR) to legal final
maturity at 1.5x for the class A and 1.3x for the class B compare
well with Marston's closest peers, Greene King, Spirit and M&B.

Regulation Changes Bring Challenges - Industry Profile: Midrange
Fitch views the operating environment as 'weaker'. While the pub
sector in the UK has a long history, trading performance for some
assets has shown significant weakness in the past. The sector is
highly exposed to discretionary spending, strong competition
(including from the off-trade), and other macro factors such as
minimum wages, rising utility costs and potential changes in
regulation (with the proposed statutory code in the
tenanted/leased segment).

Fitch views barriers to entry as 'midrange'. Licencing laws and
regulations are moderately stringent, and managed pubs and
tenanted pubs (i.e., non-full repairing and insuring) are fairly
capital-intensive. However, switching costs are generally viewed
as low, even though there may be some positive brand and captive
market effects.

The sustainability of the sector is viewed as 'midrange', with
the strong pub culture in the UK expected to persist, thereby
taking a large portion of the eating-drinking-out market. In
relation to demographics, mild forecast population growth in the
UK is credit positive.

Transformed Estate; Uneven Growth: Company Profile - Midrange
Financial Performance: Midrange

In 2016, Marston's concluded a three-year effort to transform its
estate, including selling low performing tenanted pubs,
converting many tenanted pubs to the franchise model, upgrading
existing pubs and offering accommodation to drive additional pub
sales. Trailing 12 month (TTM) March 2018 EBITDA within the
securitised estate increased year on year (+0.8%), after a
contraction in TTM April 2017 (-0.7%).

Company Operations: Midrange

Management has been pro-active in turning around its tenanted
business including being the first to launch hybrid
tenanted/managed pubs with their franchise agreement model. Many
converted pubs have experienced a double digit percentage
increases in sales. However, Fitch believes that long-term profit
levels remain uncertain given weak industry fundamentals despite
the turn-around efforts. By contrast, the managed estate is
relatively unchanged.

Transparency: Midrange

Information is sufficient to form a view on key trends. The
securitised estate contributes about 54% of Marston's total
EBITDA and other than key financial metrics, much of the
information is available on a total estate basis, which reduces
transparency. Financial reporting follows the managed/tenanted
format, without separating out the franchise model pubs.

Dependence on Operator: Midrange

Due to the large size of the estate, w Fitch does not view
operator replacement as straightforward but it should be possible
within a reasonable period of time.

Asset Quality: Midrange

Fitch considers the pubs to be reasonably well-maintained. In the
past, management channelled disposal proceeds into debt repayment
(repayment of the GBP80.0 million AB facility in January 2014)
and some capital enhancement of the estate. In the TTM to March
2018, Marston's spent GBP21.7 million on capital enhancement and
GBP43.1 million maintenance capex (about 10.7% of securitised
sales) on the securitised estate, which is above the covenant
level and slightly higher than peers. The secondary market is
reasonably strong, demonstrated by Marston's recently concluded
significant disposals programme and ongoing disposals within the
tenanted estate.

Standard WBS Structure: Debt Structure - Stronger (Class A)
Junior, Back-Ended Amortisation: Debt Structure - Midrange (Class
B)

Debt Profile: Class A / B: Stronger

Fitch views the debt profile as 'stronger' for both the class A
and B notes. The debt is fully amortising but there is some
concurrent amortisation of class B. Additionally, there is only a
three-year difference between the class A and B maturities. The
liquidity facility covers almost two years of debt service.
Positive factors include 100% fixed or hedged debt and strong
creditor protections.

Security Package: Class A: Stronger; Class B: Midrange
Fitch views the security package as 'stronger' for the class A
notes and 'midrange' for the class B notes. The security package
is strong with comprehensive first ranking fixed and floating
charges over borrower assets. Class A is the senior ranking
controlling creditor, with the class B lower ranking resulting in
a 'midrange' assessment.

Structural Features: Class A/B: Stronger

Stronger features include a minimum of 18 months liquidity
facility, highly rated financial counterparties with adequate
downgrade language and a clear orphan SPV. Marston's also
benefits from a clear set of covenants and moderate restricted
payment and default covenants relative to the industry.

Financial Metrics - Uneven Performance in Recent Years

Fitch's rating case forecast DSCR averages 1.5x for class A and
1.3x for class B, slightly lower than the 2017 forecast. TTM
March 2018 EBITDA was GBP116.8 million versus the previous year's
GBP115.9 million. The EBITDA increase was mainly due to higher
tenanted sales and EBITDA per pub.

Marston's metrics are in line with criteria guidance, although
with a limited cushion at the 'BBB' rating for the class A notes.
Underperformance of the forecast could lead to a revision of the
Outlook to Negative or a downgrade.

PEER GROUP

Fitch compares Marston's ratings with those of Greene King,
Spirit and M&B. M&B comprises managed pubs, whereas the other two
transactions comprise managed and tenanted pubs, although the
share of tenanted pubs in Spirit is much lower than in the
others. Managed pubs generate about 70% of EBITDA for Greene King
and Spirit. In contrast, Marston's managed division generates
around 50% of securitisation EBITDA. Fitch considers a higher
proportion of managed pubs to be a stronger feature due to
managed pubs having greater transparency and control.

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action:

  - A significant outperformance of the rating case due to strong
growth in the managed estate division and further success of the
franchise model, resulting in consistent deleveraging, could lead
to an upgrade.

  - Fitch could consider an upgrade if its rating case DSCR rises
to 1.8x for class A and 1.5x for class B.

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action:

  - The ratings could be negatively impacted if performance is
significantly below the current rating case. This could be due to
further pub disposals in the managed estate, greater than
expected cost pressure from the introduction of the national
living wage or even weaker than expected performance of tenanted
pubs.

  - A further deterioration of the Fitch rating case DSCR below
1.5x for class A and 1.3x for class B could lead to a downgrade

CREDIT UPDATE

Performance Update

Tenanted sales and EBITDA per pub improved in TTM March 2018,
while managed sales per pub declined slightly. However, EBITDA
per managed pub increased by 0.9% due to a decrease in operating
costs per pub. Overall, total combined estate TTM EBITDA to March
2018 increased by 0.8%. Marston's has outperformed last year's
rating case EBITDA forecast by 1.0%.

In the tenanted estate, EBITDA margins have remained stable.
Tenanted sales per pub grew by 7%, in part due to the tail effect
of the estate rationalisation. The overall estate quality has
improved, demonstrated by improved sales and EBITDA per pub.

Fitch Cases

Fitch has assumed among other things that the number of managed
and tenanted pubs in the portfolio will remain stable. Overall,
the Fitch rating case assumes a combined estate EBITDA 18-year
CAGR to final maturity of the notes of 0.4%.

Asset Description

The transaction is a securitisation of both managed and tenanted
pubs operated by Marston's comprising 280 managed pubs and 898
tenanted pubs.


MOTHERCARE: Rules Out Management Buyout Following CVA
-----------------------------------------------------
Elias Jahshan at Retail Gazette reports that Mothercare has ruled
that a management buyout was "100 per cent not" an option in the
future, just days after it launched its CVA and posted plunging
annual profits.

The news, as reported by Reuters, comes after Bloomberg first
reported that chief executive Mark Newton-Jones had proposed
taking the struggling maternity retailer private one year before
his departure in April, Retail Gazette relates.

He was re-hired for the top job after he was ousted by the board
in late April, Retail Gazette states.

According to Retail Gazette, Mothercare said in a statement that
"at certain points the board considers various strategic options
available to the company.

"However, no specific plans were drawn up in relation to a
management buyout."

Mothercare's for full year ending March 24 last week featured
GBP72.8 million in pre-tax loss, compared to a GBP7.1 million
profit in 2016/17, Retail Gazette discloses.

Mothercare, as cited by Retail Gazette, said this loss came about
from a raft of restructuring and closure costs, as well as store
asset impairments and onerous leases.

Meanwhile, total sales fell 1.9% to GBP654.5 million and net debt
was lower at GBP44.1 million, Retail Gazette relays.


POUNDWORLD: To Close 117 Stores Amid CVA Proposals
--------------------------------------------------
Ben Stevens at Retail Gazette reports that Poundworld is planning
to close 117 of its 355 stores amid its company voluntary
arrangement (CVA) proposals.

The embattled discount retailer, which was revealed to be
planning a CVA last month, will close the stores by August 31
this year and rent reductions will be sought on the remaining
231, Retail Gazette relays, citing The Grocer.

In a document laying out the details of its CVA, Poundworld
revealed it had been hammered by the loss of its credit
insurance, Retail Gazette discloses.

Not only did this mean Poundworld faced a GBP6 million bill to
its suppliers, but also led to a difficult Christmas period, as
it suffered from stock availability issues, Retail Gazette
states.

The Brexit-hit sterling, rising overheads including business
rates and wages, as well as falling consumer spend were all also
cited as difficulties, according to Retail Gazette.

It will now seek an additional GBP15 million in funding Santander
once the CVA is completed to drive its turnaround effort, Retail
Gazette says.

This is on top of an emergency cash injection of GBP20 million
from its owner TPG in February, which it said it had already
"utilized", Retail Gazette notes.

TPG, which also owns restaurant chain Prezzo which entered a CVA
earlier this year, is reportedly seeking a buyer for the chain as
it drives the turnaround effort, according to Retail Gazette.


THPA FINANCE: Fitch Affirms Rating on Class C Notes at 'B'
----------------------------------------------------------
Fitch Ratings has affirmed THPA Finance Limited's ratings as
follows:

GBP84.3 million class A2 secured 7.127% fixed-rate notes due
2024: affirmed at 'BBB'; Outlook Stable

GBP70 million class B secured 8.241% fixed-rate notes due 2028:
affirmed at 'BB-'; Outlook Stable

GBP30 million class C secured 10% fixed-rate notes due 2031:
affirmed at 'B'; Outlook Stable

THPA Finance Limited (THPA) is a whole business securitisation,
backed by the revenue and income of the port of Tees and
Hartlepool in the UK.

KEY RATING DRIVERS

The ratings reflect THPA's tariff flexibility and the expected
growing contribution of long-term leases, which mitigate Tees and
Hartlepool's exposure to volatile cargo types and customer
concentration. The solid debt structure, typical of a UK WBS
transaction, together with a stable free cash flow (FCF) debt
service coverage ratio (DSCR) averaging 1.4x, places the class A
notes' rating at 'BBB'. The multiple-rating notch difference
between debt tranches reflects the strong protective features of
the senior notes at the expense of the junior notes.

The non-investment-grade ratings of the junior class B and C
notes reflect their deep contractual subordination, their low
average projected FCF DSCR under Fitch's rating case, at around
1.0x for the class B notes and 0.9x for the class C notes, and
the absence of dedicated liquidity reserves.

Customer Concentration, Volatile Cargo - Revenue Risk (Volume):
Midrange

Tees and Hartlepool is a secondary port of call on a single site
exposed to customer and industry concentration. ConocoPhillips,
which exports oil and gas, accounted for 42% of THPA's 2017
volumes and approximately 25% of the group's conservancy and
property EBITDA before general overheads and exceptional items,
exposing the business to the volatile oil market. Fitch expects
the lease agreements with MGT Teesside (MGT) and Trafigura to
sustain volumes handled at the port, once operations start from
2020 and mid-2018, respectively.

The facility is well-connected to the local market and the
inland, limiting its competitive exposure to other regional
facilities. However, Fitch views the hinterland as a marginal
growth driver. The Tees valley is a low-growth area focused on
the chemical and manufacturing industry, exposed to low-cost
supplies from emerging countries and contraction in global
demand.

Tariff Flexibility, Long Leases - Revenue Risk (Price): Midrange
Tariffs are unregulated and, to a varying extent, linked to UK
RPI. Fitch expects guaranteed revenue as a share of total revenue
to grow to above 20% in 2018, mainly driven by the long-term
lease contracted with MGT Teesside and the 10-year lease
agreement with Trafigura, but also by the organic growth of the
property business.

Flexible Plan, External Contributions - Infrastructure and
Renewal Risk: Midrange

The port is generally well-maintained. Some refurbishments were
completed in 2016 to allow the processing of larger vessels.
Phase 3 of the large refurbishment of the n.1 Quay was completed
in 2017 with MGT's co-investment. Fitch expects capex to be
funded internally through free cash, contributions from lessees,
unsecured debt and by the equity sponsor.

Senior Class A Well-Protected - Debt Structure: Stronger for
Class A, Midrange for Class B and C

All classes are fully amortising, with a strong security package
of fixed and floating charges typical for WBS with the
possibility of appointing an administrative receiver. There is no
interest rate risk. However, a borrower event of default could
lead the class A noteholders to enforce and accelerate at the
expense of the junior notes, in particular during a downturn or
stress event. The deep contractual subordination weighs on the
junior notes' ratings.

Fitch notes the discrepancy between THPA's offering circular and
the legal documentation in which there is no liquidity facility
for the class B and C notes. Fitch's analysis is aligned with the
transaction documentation. In Fitch's view, this does not
prejudice the ratings of the senior class A notes and the junior
class B and C notes because the junior debt service can be
deferred. Any deferral of junior debt service does not represent
a payment default until the final maturity of each respective
note. Amortisation of the junior notes is back-ended, starting
once the class A notes have been fully redeemed.

Financial Profile

The projected minimum of average or median FCF DSCR in Fitch's
rating case stabilised at 1.4x for the class A notes, at 1.0x
(down from 1.1x in Fitch's 2017 forecast) for the class B notes
and remained flat at 0.9x for the class C notes. The reduction in
class B's FCF DSCR is a consequence of Fitch's slight upward
revision of maintenance capex assumptions. Fitch's updated break-
even analysis shows that the class A notes can sustain up to an
annual decline of 11.2% (2017 forecast: 5.8%) in EBITDA before
reaching an average FCF DSCR of 1.0x and consequently drawing on
liquidity. Fitch's rating case projects higher headroom to the
covenanted EBITDA DSCR compared with the 2017 forecast.

PEER GROUP

In comparison with ABP Finance PLC (ABP; A-/Negative), THPA's
debt structure is fully amortising in contrast to ABP's exposure
to refinance risk and higher leverage. However, ABP's revenue
profile is significantly more diversified in location and cargo
type and is more resilient to downturns as about 40% of its
revenue is either contractually fixed or subject to minimum
guarantees.

RATING SENSITIVITIES

Future Developments That May, Individually or Collectively, Lead
to Negative Rating Action:

  -EBITDA volatility reducing the headroom to the covenanted
level of EBITDA DSCR or triggering a covenant breach not cured by
the sponsor

  -A reduction in oil revenue or the loss of a major customer
adversely affecting the transaction's revenue and leading to FCF
DSCR consistently below 1.35x at class A, 1.0x at class B and
0.9x at class C.

Future Developments That May, Individually or Collectively, Lead
to Positive Rating Action:

  -A substantial increase in the throughput or other positive
development of the business leading to a FCF DSCR consistently
above 1.6x at class A, 1.2x at class B and 1.0x at class C.

CREDIT UPDATE

Performance Update

Compared with December 2016, 2017's performance benefited from
management's ability to attract new long-term leases, with a
year-on-year increase of 10% and 15% in revenue and trading
EBITDA excluding exceptional items, respectively. 2017 EBITDA
reached GBP38 million, slightly below Fitch's projected base case
EBITDA of GBP39 million due to higher-than-expected port
operation overheads, mainly related to staff costs, utility costs
and volume-related costs.

Fitch Cases

Fitch's rating case incorporates conservative FCF assumptions
factoring in low organic growth in both the port operations and
the conservancy business, the contribution of the long-term
leases contracted with MGT and Trafigura, more conservative
maintenance capex projections of GBP10 million a year (indexed)
than last year projections of GBP7.5 million a year, and pension
deficit contributions of GBP2 million a year increasing over
time. The upward revision of the maintenance capex is in line
with THPA's expectation of proactively managing the replacement
of significant items such as plant for bulk and unitised
operations and vessels.

Asset Description

THPA is a securitisation of the assets held, and earnings
generated, by the PD Ports group, which owns and operates the
port of Tees and Hartlepool as the statutory harbour authority on
the northeast coast of England.


===============
X X X X X X X X
===============


* EUROPE: Finance Ministers Agree on Reforming Bank Capital Rules
-----------------------------------------------------------------
Francesco Guarascio at Reuters reports that European Union
finance ministers reached an agreement on May 25 on reforming
bank capital rules, a major step towards boosting the bloc's
financial stability and a stepping stone towards a deal on a
backstop for its bank-rescue fund in June.

The accord came after 18 months of heated debate among the 28 EU
governments on how to apply new global bank capital rules that
overhauled financial regulations after the 2007-2009 global
crisis, Reuters notes.

It paves the way for another breakthrough on the bloc's bank
rescue fund, which ministers committed on May 25 to equip with a
backstop, although the final decision will be made only in June,
Reuters states.

According to Reuters, the two measures are seen as interlinked
because the banking capital rules are expected to reduce bank
risk, which would allow more sharing of risk among euro zone
countries in the form of a common backstop to prop up the
sector's rescue facility, known as Single Resolution Fund.

Under the accord, which must be approved by EU lawmakers,
European banks will have to abide by a new set of requirements
aimed at keeping their lending in check and ensuring they have
stable funding sources, Reuters discloses.

Under the deal, the euro zone's agency for troubled banks, the
Single Resolution Board, will be given a clearer mandate to set
the level of capital buffers that banks should hold against the
risk of failure, according to Reuters.

The so-called Minimum Requirement for own funds and Eligible
Liabilities (MREL), which introduces into EU legislation the
global standard known as Total Loss Absorbing Capacity (TLAC),
will be set at 8% of large banks' total liabilities and own
funds, Reuters says.

The SRB will, however, be able to require higher buffers for
banks it deems insufficiently safe, or a lower buffer for better
capitalized institutions, Reuters relates.



                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets.  At first glance, this list may look
like the definitive compilation of stocks that are ideal to sell
short.  Don't be fooled.  Assets, for example, reported at
historical cost net of depreciation may understate the true value
of a firm's assets.  A company may establish reserves on its
balance sheet for liabilities that may never materialize.  The
prices at which equity securities trade in public market are
determined by more than a balance sheet solvency test.

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/booksto order any title today.


                            *********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman,
Editors.

Copyright 2018.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000.


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